A fixed cost: Multiple Choice Requires the future outlay of cash and is relevant for future decision making. Does not change wit
h changes in the volume of activity within the relevant range. Is directly traceable to a cost object. Changes with changes in the volume of activity within the relevant range.
A fixed cost: Does not change with changes in the volume of activity within the relevant range
Step-by-step explanation:
Fixed Cost:
In economics, a fixed cost in a specified period of time does not change with respect to an increase or decrease in the production of goods or services. In contrast, the variable cost changes in proportion to changes in production of goods or services.
Examples of Fixed Cost:
Salaries, Rents, insurance payments, taxes, some utilities etc
The correct answer is letter "B": Does not change with changes in the volume of activity within the relevant range.
Explanation:
In economics, fixed costs are operating costs and do not change as output rates increase or decrease. It is one of two different kinds of business expenses, and the other is variable costs which vary as output rates change. Examples of fixed costs are <em>depreciation, insurance, rent </em>or <em>utilities</em>.
