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    Question

    A cost that remains unchanged in total, regardless of

    changes in the level of activity, within a relevant range is a:
    A Variable Cost Correct Answer Incorrect Answer
    B Fixed Cost Correct Answer Incorrect Answer
    C Semi-variable Cost Correct Answer Incorrect Answer
    D Step Cost Correct Answer Incorrect Answer

    Solution

    A fixed cost is one whose total amount does not change with changes in the volume of activity over a reasonable range of activity (the relevant range). Examples include rent, managerial salaries, and insurance.

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