Home › US CMA Part 1 › Accounting › Cost-Volume-Profit Analysis › Fixed costs are defined as costs that will not c…
Fixed costs are defined as costs that will not change within a given range of:
AProduction
BAdvertising
CEmployment
DBorrowing
Answer & Solution
Correct answer: A. Production
1. Costs are classified by how they respond to output.
2. Some costs stay the same whether output rises or falls.
3. Fixed costs are those costs that will not change within a given range of production.
4. Rent on a factory is the standard example.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 3 'Cost-Volume-Profit Analysis'_
Related questions
A firm below its break-even point is making a loss because contribution margin has not yetRaising the selling price while holding variable cost constant changes the contribution maFixed costs of 13,500 dollars and a contribution margin of 60 dollars per unit give a breaA product selling for 100 dollars with a 60 dollar contribution margin has a contribution A birdbath selling for 100 dollars with 40 dollars of variable cost has a contribution marThe contribution margin ratio tells you what percentage of the selling price exceeds:Contribution margin per unit is available to cover which costs first?A cost that rises by a set amount for each additional unit made is: