Which of the following statements regarding fixed costs is incorrect?
A)Expressing fixed costs on a per unit basis usually is the best approach for decision making.
B)Fixed costs expressed on a per unit basis will decrease with increases in activity.
C)Total fixed costs are constant within the relevant range.
D)Fixed costs expressed on a per unit basis will increase with decreases in activity.

Question

Quizplus · Accepted Answer

Expressing fixed costs on a per unit basis can be misleading as fixed costs remain constant regardless of changes in activity level. Therefore, it is not usually the best approach for decision making.

Which of the Following Statements Regarding Fixed Costs Is Incorrect