## Question

###### Which of the following statements regarding fixed costs is incorrect? Total fixed costs are constant within...

Which of the following statements regarding fixed costs is incorrect?

Total fixed costs are constant within the relevant range. |

Fixed costs expressed on a per unit basis will decrease with increases in activity. |

Fixed costs expressed on a per unit basis will increase with decreases in activity. |

Expressing fixed costs on a per unit basis usually is the best approach for decision making. |

## Answers

Expressing fixed costs on a per unit basis usually is the best approach for decision making is incorrectFixed costs should be expressed in absolute amount as it remains constant within the relevant range. Expressing fixed costs on a per unit basis is not the correct approach for decision making. Fixed costs expressed on a per unit basis decreases with increases in activity and increases with decrease in activity. Option D should be selected.

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