In linear cost function, the fixed cost is considered as _________?
Correct answer: A. constant
- A. constant
- B. variable
- C. exponent
- D. base
Explanation
In a linear cost function, fixed cost does not change with the activity level within the relevant range, so it is constant. Variable cost, in contrast, changes with the cost driver.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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