COST ACCOUNTING
COST VOLUME PROFIT ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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fixed cost equal zero
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total cost equal zero
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net income equal zero
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variable cost equal zero
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Detailed explanation-1: -When the output is equal to zero, the variable cost is zero. Variable costs are those that depend on the level of output. The fixed costs are those that are present even when production is zero, and therefore the variable cost is zero when output is zero.
Detailed explanation-2: -The change in the total cost is always equal to zero when there are no variable costs.
Detailed explanation-3: -With a production volume of zero, there are no variable costs associated with it. Variable costs include things like utilities, direct labor, raw materials, and commissions.
Detailed explanation-4: -Variable costs change directly with the output – when output is zero, the variable cost will be zero. The total variable cost to a business is calculated by multiplying the total quantity of output with the variable cost per unit of output.