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Patricia Harrah
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Trina Garrison
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Ann Ricker
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Niamh Mitchell
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Daniel Hardy
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Joan Grant
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Kenneth Miller
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Noah Thomson
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Maxim Beck
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Noel Macdonald
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Ben Stevenson
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Which of the following statements is true regarding fixed and variable costs
Fixed costs are fixed in total, and variable costs are fixed per unit
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Which of the following statements is TRUE regarding fixed and variable costs?
Fixed costs are fixed in total, and variable costs are fixed per unit.
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Which of these statements is true regarding fixed and variable costs? A. Both fixed and variable costs increase as activity volume increases. B. Fixed costs increase and variable costs decrease in total as activity volume decreases. C. Both fixed and variable costs stay the same in total as activity volume increases. D. Fixed costs stay the same and variable costs increase in total as activity volume increases (within relevant range).
D. Fixed costs stay the same and variable costs increase in total as activity volume increases (within relevant range).
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As a company begins to operate outside the relevant range, the accuracy of cost estimates for fixed and variable costs:
Fixed Decrease and Variable Decrease
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FALSE Although fixed and variable costs do not behave in the same way, small businesses often treat them identically—this average pricing approach is thus a dangerous one.
Average pricing is an appropriate pricing approach for small businesses because the method takes into consideration both fixed and variable costs. True or False?
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* A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Atlanta; FC= $80,000/yr; VC=$20/unit Phoenix; FC=$140,000/yr; VC=$16/unit 1. If the annual demand will be 20,000 units, what would be the cost advantage of the better location? a. $20,000 b. $460,000 c. $480,000 d. $80,000 e. $60,000 2. If annual demand is estimated to be 20,000 units, which location should the company select? (Refer to #1) a. Atlanta b.. Phoenix c. either Atlanta or Phoenix d. reject both Atlanta and Phoenix e. build at both locations
1. a. $20,000 2. b. Phoenix
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