Which of the following statements is true?

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BlackTom AI · Accepted Answer

The question asks which statement is true about costs in relation to changes in sales volume. 
Option 1: 'Total costs do not vary with changes in sales volume.' This is generally false, because while fixed costs stay constant in total over a relevant range, total costs typically rise with volume due to variable costs. So this option misstates the usual behavior of total costs.
Option 2: 'Total fixed costs do not vary with changes in sales volume.' This is essentially the standard definition of fixed costs: they do not vary with the level of production or sales within the relevant range. However, note that in practice fixed costs are constant in total, not per unit, and may vary outside the relevant range. Within the typical context, this statement is true, but it depends on the interpretation of the scope (relevant range) and exact wording in context.
Option 3: 'Total variable costs do not vary with changes in sales volume.' This is incorrect because variable costs by definition change in total as sales volume changes (they vary proportionally with volume).
Option 4: 'Total fixed costs per unit do not vary with changes in sales volume.' This is false. Fixed cost per unit actually decreases as volume increases (spreading the same fixed cost over more units), and increases as volume decreases. So the per-unit fixed cost is not constant with respect to volume.
In summary, the core concept is that fixed costs in total are constant across changes in sales volume within the relevant range, while variable costs change with volume. The provided correct-sounding statement in the prompt aligns with the general idea of fixed costs not varying in total, but the exact option that states that idea is not present verbatim among the listed choices, which can lead to confusion if one assumes an exact match is required.

11:709:448:01 FOOD PROD MGMT FINAL Exam - F25- Dec 18- Requires Respondus LockDown Browser

Which of the following statements is true?

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