Companies that adopt value-added pricing ________. A discretionary fixed cost is an expenditure for a period-specific cost or a fixed asset, which can be eliminated or reduced without having an immediate impact on the reported profitability of a business. Which of the following pricing strategies is the pharmaceutical company most likely using in this instance? Fixed Cost: A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. The long-run average cost (LRAC) curve indicates the ________. The cost of each machine is $20 per day regardless of the number of corks produced. Fixed Cost A cost that does not change of goods is produced Variable Cost cost that rises or falls depending on the quantity produced Total Cost cost of producing one more unit of a good Marginal fixed variable producing one more unit of a good Marginal Revenue Additional income from selling one more unit for a good sometimes equal to price Internet expenses, etc. Whats the difference between fixed and variable expenses? Which of the following choices correctly classifies a committed fixed cost and a discretionary fixed cost? 100) DivetheBlue, a company marketing deep-sea diving equipment, charges very high prices for its products. Store's employees salary. Fixed costs are unaffected by activity changes, unlike variable costs. See Answer Which of the following is a fixed cost? Fixed Cost is definite; it will incur even when there is no units are produced. b. Is raw materials a fixed cost? Car insurance can be a fixed expense as long as the policy holder avoids any incidents. Wages for unskilled labor. A fixed cost, on the other hand, is a cost that a company must pay regardless of whether it produces one or a million goods. When marginal cost is less than average total cost. Rent is a fixed expense. Total mixed cost . Fixed cost arising from annual decisions by management to spend in certain areas, such as advertising and research To obtain the break-even point in terms of dollar sales, total fixed expenses are. Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged? This exemplifies its ________ costs. Average fixed costs are total fixed costs divided by the number of units of output, that is, fixed cost per unit of output. Which of the following is a cost-based approach to pricing? Depreciation cannot be considered a variable cost, since it does not vary with activity volume.However, there is an exception. This reflects Bon Vivant's ________ pricing strategy. By contrast, variable expenses can change. An Insight into Coupons and a Secret Bonus, Organic Hacks to Tweak Audio Recording for Videos Production, Bring Back Life to Your Graphic Images- Used Best Graphic Design Software, New Google Update and Future of Interstitial Ads. Azure Air, an airline company, offers attractive prices to customers with tighter budgets. Which of the following are a fixed cost of doing business? Meanwhile, you always need to pay your electric, water, or any other utility bill, making it a fixed cost a staple in your budget.). 4 Which example is a fixed expense quizlet? Fixed expenses are different from variable expenses because fixed expenses are consistent cost that need to be paid at specific times. For instance, Tom owns a small manufacturing company that makes parts for small jets. She operates the company out of a home office. Total fixed costs and total variable cost will change B. B. 13) Which of the following processes does value-based pricing reverse? per unit. Examples of fixed expenses Rent or mortgage payments. Question: Which of the following is a fixed cost? Click the card to flip She upgrades her computer hardware at a cost of $\$ 5,000$per year in order to stay current with new technology. As a manufacturer increases the price, ________. PoolPak specializes in and differentiates itself through both cutting-edge technologies used to build its high-value climate control systems as well as seamless quality service. Parkers controller suggests that a generous sales discount policy would increase annual sales to 2,000 units Who are the experts? John assured his venture capitalists an earning of 25-percent return on equity when he began his IT startup. A fixed variable expense is a cost that you pay every month, but the amount can change from month to month. Property insurance is a common example of a fixed operating cost. 6 Whats the difference between fixed and variable expenses? .Advertisements. Assume the number of machines does not change. a. dependent variable b. independent variable c. slope parameter d. intercept parameter d. intercept parameter What does activity refer to in the formula: total cost = fixed cost + variable cost per activity x # activity? Gallo's cork factory experiences diminishing marginal product of labor with the addition of which worker? Compute Naple's net income under absorption costing. Which is an example of a fixed expense quizlet? View complete answer on realized1031.com Which of the following is considered an operating expense? Refer to Figure 13-1. Can someone help me by describing each design? Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings? **Required:** Experience-curve pricing assumes that ________. In order to achieve this result, he will most likely use which of the following pricing approaches? This problem has been solved! b. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Bruno Servers has decided to decrease its prices on its popular higher-range servers. Which of the following is an external factor that affects pricing decisions in a company? What can fixed costs sometimes be referred to? ________ refers to the amount of money charged for a product or service. In producing the 7,000 staplers, the firm's average variable cost was. The company can reasonably expect ________ to increase. C. variable expense per unit increases. Multiple Choice. Cost of goods sold is $6 per unit. Fixed costs are expenses related to your company's products or services that must be paid regardless of sales volume. Each of the 275 units sold was sold for a price of $95. What would the average fixed cost be if ten units were produced? $$. This exemplifies ________. Which of the following costs of publishing a book is a fixed cost? These prices are neither limited-time offers nor special discounts, but represent the daily prices of products sold by Bon Vivant. Although the additional features increased the price of the laptops by $500, Pegasus was confident that the strategy would help boost demand for its laptops substantially. If a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity. Total fixed costs for the company would be $16,000 in this case. The movie industry in a country is controlled by six large studios that receive 90 percent of the annual revenues from movies. Which of the following involves introducing less-expensive versions of established, brand name products? Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition. Straight-line depreciation, insurance, property taxes, rent, supervisory salaries, administrative salaries, and advertising are all examples of fixed costs. The learning curve is representative of the ________. What is John's annual opportunity cost of the financial capital that has been invested in the business? Fixed selling expenses are $10,000 and variable selling and administrative expenses are $3 per unit. Is manufacturing cost fixed or variable? If Gallo's produces at a rate of 35 corks per hour, what is the total labor cost per hour? Within the relevant range, if there is a change in the level of the cost driver then A. Depreciation is a fixed cost, because it recurs in the same amount per period throughout the useful life of an asset. take advantage of the discount. This is an example of a(n) ________. Target return pricing is a variation of which of the following cost-oriented pricing approaches? Those two types are, Some costs do not vary with the quantity of output produced. Your electric bill will be higher in the winter if you live in a colder climate and lower in the summer months. John has decided to start his own lawn-mowing business. A production function is a relationship between, The magical product of labor can be defined as. This answer has been confirmed as correct and helpful. If a business employs a usage-based depreciation methodology, then depreciation will be incurred in a pattern that is more consistent with a variable cost. 7 What is an amortization expense on an insurance policy? Why is markup pricing most likely impractical? In industries in which pricing is a key factor, ________ often set the best prices or help others in setting them. She had the option of renting the space out for $\$ 2,000$a year if she didn't utilise it as her office for business. Committed Discretionary A. In addition to overhead for your company's office or manufacturing facility, rent for that space may also be considered. Refer to Figure 13-3. Each unit cost Parker$350. B) They are fixed in total. Fixed cost for a store can be: Store's Rent. Labor costs are estimated between $345 and $435 while parts are priced between $1,184 and $1,408. Jackie is aware that if she didn't own her own business, she could go back to her prior position at a significant software company, where she would receive a salary of $\$ 60,000$annually. (Select 3 answers.) A total-cost curve shows the relationship between the. Despite the availability of many low-priced products in the market, customers seem to prefer DivetheBlue, which has earned a reputation for selling high-quality products. c. $28,500. The term reserves is used under IFRS with reference to all of the following except: Refer to Table 13-3. Fixed costs do not vary with the production level. We can also conclude that fixed costs are not relevant for production decisions. A. Round answer to the nearest tenth of a cent. This is the gradual charging to expense of the cost of an intangible asset (such as a purchased patent) over the useful life of the asset. As production workers become better organized and more familiar with equipment, the average cost per unit tends to decrease with the ________. Direct materials cost C. Direct labor cost D. Straightminusline depreciation expense This problem has been solved! The Latest Innovations That Are Driving The Vehicle Industry Forward. During 2019, Parker sold 1,500 units at an average of $500 Variable costs may include labor, commissions, and raw materials. We use cookies to ensure that we give you the best experience on our website. Those costs are called, Refer to Scenario 13-5. A) The targeted value and price drive decisions about what costs can be incurred and the resulting product design. Each worker at Gallo's cork factory costs $12 per hour. Fixed costs are expenses that have to be paid by a company . When companies set prices, the government and social concerns are ________ factors affecting pricing decisions. I've been asked to discuss the strengths and weaknesses of the correlational and experimental research designs. A fixed variable expense is a cost that you pay every month, but the amount can change from month to month. Expense that stays the SAME from month to month. Variable Expenses. Wages for unskilled labor. A decision to position the product on high-performance quality will mean that the ________. Fixed costs are the costs that remain fixed in a period of time regardless of either your business is making profits or not, or your sales reach the target or not. A. When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing. C) They decrease per unit as production volume increases. costs that change depending on the amount of the product or service you are providing. PoolPak's prices are very high, but demand for its climate-control systems seems to be forever on the rise. (A good example of this is your electric bill. Which of the following best describes Azure Air's pricing method? uhc 2023 certification quizlet The average cost for rack and pinion replacement is between $1,528 and $1,843. Alexander Holmes, Barbara Illowsky, Susan Dean, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams, Divide. What is an example of a fixed cost quizlet? There are not many discretionary fixed costs, but they can be quite large, and so are worth considerable ongoing review by management. total cost divided by the number of units produced. Which of the following is the right formula for calculating total mixed cost? Jackie is the owner and operator of a website design company. These costs do not change with a property's occupancy rate. Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. The minimum points of the average variable cost and average total cost curves occur where. a. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Which of the following is true with regard to value-added pricing? They are one of three types of costs incurred by most businesses. This exemplifies ________. Refer to Figure 13-2. Examples of variable cost are packing expenses, freight, material consumed, wages, etc. Which of the following is a fixed cost? Fixed operating expenses are the actual costs associated with operating a property that do not vary in the short term. Variable costs may include labor, commissions, and raw materials. He. In producing the 7,000 staplers, the firm's average fixed cost was, Refer to Scenario 13-5. Department stores such as Kohl's and Macy's practice high-low pricing by ________. A complement of a percent is the difference of $100\%$ and the given percent. -$3,875. (A good example of this is your electric bill. What is the difference . This exemplifies ________. \text{Work in process, Dec. 31, 2016} \ldots\ldots\ldots & \text{157,600}\\ $490,000. Building depreciation Charitable contributions C. Management training Property taxes D. Equipment rentals Equipment depreciation E. Research and development Advertising \text{Work in process, Dec. 31, 2017} \ldots\ldots\ldots & \text{142,750}\\ Fixed costs may include lease and rental payments, insurance, and interest payments. Total profit for the XYZ corporation would be. Effective ________ pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value. 1 / 44 XYZ corporation produced 300 units of output but sold only 275 of the units it produced. Variable expenses are inconsistent costs that vary depending on the choices you make. Under ________, the market consists of many buyers and sellers trading in a uniform commodity. Answers: Expenditures for raw material. If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would. How do I know what size my Redshift table is? c. mixed costs What does fixed costs refer to in the formula: total cost = fixed cost + variable cost per activity x # activity? Parker Electronics sells cell phones. The average cost of production for each unit of output produced was $100. Definition: A fixed cost is an expense that does not change as production volume increases or decreases within a relevant range. A computer for recording customer and order information A monthly fee for a flea market booth A radio ad What are variable costs? 30) A company must pay each month's bills for rent, heat, interest, and executive salaries regardless of the company's level of output. Overhead is one type of fixed cost. As production moves up, the average cost per unit decreases because ________. $$ g(x, y)=\frac{y}{x}+\frac{x}{y} ; g(1,2), g(2,-3) If you continue to use this site we will assume that you are happy with it. Each worker at Gallo's cork factory costs $12 per hour. C.the fixed costs and the variable cost per unit will not change. which of the following is a fixed cost? \text{Factory overhead costs} \ldots\ldots\ldots & \text{24,000}\\ Fixed costs that are difficult to change in the short term and that relate to the investment in facilities, equipment, and basic organizational structure of a firm What is Discretionary Fixed Costs? More : Which of the following is most likely a fixed cost? Fixed costs have to be paid at any cost. What is a mental disorder characterized by binge eating followed by purging? ________ refers to a measure of the sensitivity of demand to changes in price. Refer to Table 13-3. The average cost of production for each unit of output produced was $100. XYZ corporation produced 300 units of output but sold only 275 of the units it produced. This is an example of ________. Which of the following is true of a pure competitive market? Study with Quizlet and memorize flashcards containing terms like 1. $$ Amortization expense of $10,000 will be incurred as a fixed cost in books. 5 What is the difference between a variable expense and a fixed expense quizlet? C) Value-based pricing involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for its effort and risk. In other words, it is a cost that remains constant, even as output rises. The cost of each machine is $20 per day regardless of the number of corks produced. Refer to Table 13-3. As the number of workers increases. Which of the following is most likely a risk associated with experience-curve pricing? Sensing market demand for the electric toothbrush, Elmo started with an ideal selling price of $3 based on customer value considerations and then targeted costs to ensure that the price was met. Marginal costs are a function of the total cost of production, which includes fixed and variable costs. Assuming that the unit sales are unchanged, the total contribution margin will decrease if: A. fixed expenses increase. Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. Which of the following statements best captures the nature of the underlying production function? Hence it is not considered as a fixed cost. This exemplifies ________. How much total income must Jackie earn in order for her to desire to continue working for herself? She proposes 3/15, n/20 and believes that 75% of the customers will For example, the cost of insuring the factory building is a fixed cost irrespective of the number of units produced within the factory. 1. Which of the following could explain why the total product curve shifted in this diagram? Which of the following is true with regard to pure competition? Fixed costs of production are constant, occur regularly, and do not change in the short-term with changes in production. The company also claims that the new drug will help bring down the need for invasive surgeries, an additional benefit for patients. Here are several examples of fixed costs: Amortization. As Al's Radiator Company adds workers while keeping the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. We review their content and use your feedback to keep the quality high. How are marginal costs and average fixed costs related quizlet? On the other hand, companies where physical assets are required at large will have high fixed assets such as airlines, auto manufacturers, etc. d. fair value differences. If the controller is correct, determine how much the new sales discount policy would add to Which of the following is true about the demand curve? Variable Expense. The experience curve reveals that ________. Variable costs are described by which of the following statements? This exemplifies ________. Price setting is usually determined by ________ in small companies. This is an example of ________ pricing. D. the fixed costs will remain the same, but the variable cost per unit may change. Examples of fixed costs are rent and insurance payments, property taxes, and employee salaries. Fixed expenses are your weekly, monthly, or annual bills that dont fluctuate. \text{Direct labor} \ldots\ldots\ldots & \text{63,150}\\ Fixed Expense. Utilities- the cost of electricity, gas, phones, trash and sewer services, etc. This range does not include taxes and fees, and does not factor in your specific vehicle or unique location. Target return pricing uses the concept of a(n) ________, which shows the total cost and total revenue expected at different sales volume levels. ________ pricing refers to offering just the right combination of quality and gratifying service at a fair price. Expert Answer. Why does total contribution margin decrease if unit sales are unchanged? Variable costs for Jan's lemonade stand now include the cost of, The amount by which total cost rises when the firm produces one additional unit of output is called. What is the difference between a variable expense and a fixed expense quizlet? A. A) They vary per unit. $26,125. Following joint replacement labor, direct materials and labour prices spike, causing inflation wages. ________ pricing uses buyers' perceptions of value as the key to pricing. CONTINUE READING BELOW What are 4 examples of fixed costs? Which of the statements below is most consistent with the shape of the total cost curve? Question: which of the following is a fixed cost? Each of the 275 units sold was sold for a price of $95. It's a cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. This is a periodic premium paid under the agreement of policy. D. variable expense per unit decreases. When this occurs, Al's Radiator Company encounters, Suppose Jan started up a small lemonade stand business last month. See Answer See Answer See Answer done loading. The company's customers are more concerned about service support for maintaining their systems than the initial price of the product. Elmo Inc., a global conglomerate, designed the ElBrush, an electric toothbrush. Sales commissions expense B. flow. Total fixed costs remain the same, within the relevant range. In Via del Mar, Chile, a large number of shops specialize in selling the same quality of seafood products along the beach frequented by tourists. Total mixed cost = (Variable cost per unit x Number of units) + Total fixed cost. However, the fixed cost per unit decreases as production increases, because the same fixed costs are spread over more units . Which of the following is an implicit cost? 1 Which one of the following is a fixed expense? Total profit for the XYZ corporation would be a. Which is an example of a fixed cost business? A no-frills airline, it charges for all other additional services, such as baggage handling and in-flight refreshments. Some of the business is like website design, tax preparation, etc. This is the gradual charging to expense of the cost of a tangible asset (such as production equipment) over the useful life of the asset. straight-line depreciation, insurance, property taxes, supervisory salaries, admin salaries, advertising, rent, Since fixed costs remain constant in total, the average fixed cost per unit becomes progressively smaller as the level of activity increases. In which situation is the market dominated by one seller? A downward-sloping experience curve is indicative of ________. ________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk. Expense that CHANGES from month to month. Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. Fixed costs are less controllable than variable costs because they aren't based on volume or operations. In other words, fixed costs are locked in place as long as operations stay within a certain size. Fixed costs can include property taxes, rent, salaries and the cost of benefits for non-sales and management personnel. What total revenue would result in Jackie having an accounting profit of only zero? Consider a company that pays $10,000 per month for office space, $5,000 per month for machinery, and $1,000 per month for utilities. Fixed costs in accounting are costs that remain the same, and are not impacted by production levels. The simplest pricing method is ________ pricing. Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus, Don Herrmann, J. David Spiceland, Wayne Thomas, In Exercises $1$ through $16$, compute the indicated functional value. To use for allocating indirect costs & quot ; indirect costs associated w ith each cost-allocation base, ( ). A pharmaceutical company in Utah recently released a new and expensive anti-ulcer drug in the market. Fuel cost. Explain why the sales discount policy might improve cash To an economist, it is conceivable that the objective that motivates an individual entrepreneur to start a business arises from. What is the conjugate percent of $48\%$? D) They are fixed per unit and vary in total., Which of the following is a fixed cost? Property Taxes. Food, for example, can be a variable personal expense, with people spending more or less each month. Can partners limit the right of a partner to commit their partnership to contracts? Overhead costs ________ as the number of units produced increases. Total Fixed Costs A company's total fixed costs are the sum of all fixed, non-variable expenses it must pay. The shampoo used to groom pets The yarn used to make a scarf Which of the following are examples of fixed costs? Fuel cost. Companies can legitimately charge a higher price if ________. The break-even volume is the point at which ________. How much total revenue must Jackie generate to meet her accountant's definition of break-even? How much overall income would give Jackie a profit of exactly zero economically. Utilities the cost of electricity, gas, phones, trash and sewer services, etc. These include things like mortgage or rent payments, car payments, insurance premiums, utility bills, and the average amount you spend on groceries. Cost that does not change no matther how much of goods is produced, A cost that does not change of goods is produced, cost that rises or falls depending on the quantity produced, cost of producing one more unit of a good, fixed variable producing one more unit of a good, Additional income from selling one more unit for a good sometimes equal to price. At what level of output will average variable cost equal average total cost? No individual shop dares charge more than the going price without fearing loss of business to other shops. Rent, for example, is an example of a fixed cost that must be paid regardless of how many goods the company produces and sells. \begin{matrix} Promotion Management salaries B. If demand changes greatly with a small change in price, the demand is ________. Why is markup pricing most likely popular? Rent is a fixed expense. Which of the following is most likely a fixed cost? If Gallo's produces at a rate of 78 corks per hour, what is the total machine cost per day? Answers: Expenditures for raw material. What are fixed costs in business? Which of the following is true of value-based pricing? Which of the following exemplifies a pure competitive market? Which of the following is true with regard to price? The company justifies the high price of the drug by claiming that it is highly effective for treating all kinds of ulcers. Does Firm A exhibit economies or diseconomies of scale? In industrial markets, ________ typically has the final say in setting the pricing objectives and policies of a company. Fixed costs that are difficult to change in the short term and that relate to the investment in facilities, equipment, and basic organizational structure of a firm, Fixed cost arising from annual decisions by management to spend in certain areas, such as advertising and research. $$. How to Market Your Business with Webinars? c. retained earnings. net sales and gross margin. In the long run for Firm A, total cost is $105 when output is 3 units and $120 when output is 4 units. Other loan payments. Which one of the following is a fixed expense? what are two key differences between Committed and Discretionary Fixed Costs? a. gains and losses on revaluation of property, plant, and equipment. Under oligopolistic competition ________. Refer to Figure 13-2. With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________. On the other hand, variable cost remains constant in per unit. In an effort to differentiate its offerings from its competitors, Pegasus Computers decided to add an extra USB port in all its laptops besides providing a free pair of Delphi power bass headphones with every Pegasus laptop. and also improve cash flow. When marginal cost exceeds average total cost, Total cost can be divided into two types of costs. For Firm A, when four units of output are produced, the total cost is $175 and the average variable cost is $33.75. a government payment that supports a business or market. What sets the ceiling for product prices? Depreciation. B) Value-based pricing is mostly product driven. Which of these assumptions is often realistic for a firm in the short run? The larger the output, the greater the quantity of output over which fixed cost is spread, leading to lower average fixed cost . If management incentives are tied to income under absorption costing, which of the following may occur. c 7. Fixed costs are those which are fixed for the production period. PoolPak produces climate-control systems for large swimming pools. Which of the following is an internal factor that affects pricing decisions in a company? However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output. d. $30,000. B. fixed expenses decrease. Descriptions: Which of the following is most likely a fixed cost? Jackie has no additional costs. $11.72$\div$ 510, Prepare the 2017 schedule of cost of goods manufactured for Barton Company using the following information. What is an amortization expense on an insurance policy? Property Taxes. Can such an agreement be binding *(a)* on the partners and *(b)* on outsiders? If demand hardly changes with a small change in price, the demand is ________. \end{matrix} Experts are tested by Chegg as specialists in their subject area. Car payments. A) Direct materials cost B) Direct labor cost C) Straight-line . To purchase the mowers and the trailer to transport the mowers, John withdrew $1,000 from his savings account, which was earning 3% interest, and borrowed an additional $2,000 from the bank at an interest rate of 7%. The perceived value of different product offers can be reasonably assessed by ________. \text{Direct materials} \ldots\ldots\ldots & \text{\$190,500}\\ Over the long run all costs have cost drivers D. Volume of production is a cost driver of direct manufacturing cost Answer: B 7. Price setting is usually determined by ________ in large companies. However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output. Wages paid to workers however can vary as the number of workers increase or decrease. At present, Parker offers no sales discounts. Insurance payment of the equipment in the store. Lawyers, accountants, and other professionals typically price by adding a standard markup for profit. 6. ________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items. b. capital received in excess of the par value of issued shares. ________ is the only element in the marketing mix that produces revenue. A fiscal year at a total cost of an advertising campaign dedicated to one specific is. 2. Which example is a fixed expense quizlet? Total fixed costs and total variable costs will remain the same C. 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