A fixed cost:
A) Requires the future outlay of cash and is relevant for future decision making.
B) Does not change with changes in the volume of activity within the relevant range.
C) Is directly traceable to a cost object.
D) Changes with changes in the volume of activity within the relevant range.
E) Has already been incurred and cannot be avoided so it is irrelevant for decision making.

Question

Quizplus · Accepted Answer

A fixed cost is a cost that remains constant in total within the relevant range, regardless of changes in the volume of activity. Therefore, it does not change with changes in the volume of activity.

A Fixed Cost