Question

A fixed cost is a cost which

Answer 1

Answer:

The answer is c. remains constant in total with changes in the level of activity.

Explanation:

In a cost structure of a firm, for decision-making purpose, it is usually divided into fixed cost and variable cost.

Variable cost is the type of costs which will increase following an additional production of an extra unit of product/service, that is, level of activity has been risen up given the production is taken place. A good example of these cost are material cost, labeling cost.

Fixed cost, as it name may tell, is costs that are unchanged regardless of a firm's activities level. That is, regardless of how many product/service is produced, these costs remain the same. A good example of these cost are depreciation cost, rental cost.