Which statement describes a fixed cost? Are costs that vary as activity level changes, but do not stay the same per unit like variable cost. >Companies provide more detail about both specific variable and fixed cost items in a detailed CVP income statement.
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What statement best describes fixed costs?
The term fixed cost refers to a cost that does not change with an increase or decrease in the number of goods or services produced or sold.
What would be considered a fixed cost?
Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.
What cost remains the same per unit at every level of activity variable Semicon cost fixed cost mixed costs?
Terms in this set (28) What type of cost remains the same per unit at every level of activity? Variable cost. A variable cost remains the same per unit at every level of activity.
Which of the following describes contribution margin?
Contribution margin (CM), defined as selling price minus variable cost, is a measure of the ability of a company to cover variable costs with revenue. The amount leftover, the contribution, covers fixed costs or is profit.
Which of the following is an example of committed fixed cost?
Committed fixed costs: These are multiyear organizational investments that cannot be easily changed. Examples of committed fixed costs include investments in assets such as buildings and equipment, real estate taxes, insurance expense and some top-level manager salaries.
What are the characteristics of committed fixed costs?
Committed fixed costs are costs that a business has already made or obliged to make in the future; thus, cannot be recovered. Discretionary fixed costs have a short-term planning horizon. Committed fixed costs have a long-term planning horizon.
What are fixed variable costs?
Fixed cost includes expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments, while variable costs are expenses that change directly and proportionally to the changes in business activity level or volume, like direct labor, taxes, and operational
What are fixed costs quizlet?
A fixed cost is a cost that in total remains constant as volume of activity changes but on a per unit basis varies inversely with changes in volume of activity.An example of a fixed cost is a supervisor’s salary in relation to units produced.
How do you determine if a cost is fixed variable or mixed?
Fixed costs remain the same no matter how many units you produce or sell. Variable costs are directly tied to your sales and production. They fluctuate as your output increases and decreases. Mixed costs are a combination of your fixed and variable costs.
Is fixed cost per unit fixed?
Fixed costs are those that stay the same in total regardless of the number of units produced or sold. Although total fixed costs are the same, fixed costs per unit changes as fewer or more units are produced. Straight‐line depreciation is an example of a fixed cost.
Which of the following statements is true regarding fixed and variable cost?
The correct answer is option B. Fixed costs are constant in total, and variable costs are constant per unit.
What are variable costs fixed costs and mixed costs?
Based on behavior, costs are categorized as either fixed, variable or mixed. Fixed costs are constant regardless of activity level, variable costs change proportionately with output and mixed costs are a combination of both.
Does contribution margin include fixed costs?
The contribution margin represents the portion of a product’s sales revenue that isn’t used up by variable costs, and so contributes to covering the company’s fixed costs.
Which statement best describes contribution margin ratio?
When a graph is prepared with total activity on the horizontal axis and total cost on the vertical axis, what will the line depicting a fixed cost look like? A horizontal line beginning at the vertical axis.
What are the characteristics of discretionary fixed costs?
Typical examples are research and development, training, and marketing expenses. Two key characteristics distinguish discretionary fixed costs from committed fixed costs. First, discretionary fixed costs are typically short-term decisions. Second, they can be cut relatively quickly.
Which of the following is an example of fixed cost quizlet?
Examples of fixed costs include straight-line depreciation, insurance, property taxes, rent, supervisory salaries, administrative salaries, and advertising.
Are taxes fixed costs?
expenses that remain constant in total regardless of changes in activity within a relevant range. Examples are rent, insurance, and taxes. Fixed costs include salaries of executives, interest expense, rent, depreciation, and insurance expenses.
Which of the following is not the example of fixed cost?
Answer: Option (D) Direct Materials.
Which of the following is the best description of a variable cost?
A variable cost is an expense that changes in proportion to production output or sales.
What are committed fixed costs quizlet?
Committed fixed cost. a cost that cannot be changed in the short run; usually a cost that is set by someone else or because you are in contract. Committed fixed cost (example) depreciation, salaries of upper management, long term equipment leases, property taxes. Only $35.99/year.