Which of the following describes fixed costs? Selection one answer.

A.Total fixed costs are constant over the relevant range; per unit fixed costs increase with production

• B.None of these accurately describes fixed costs
• C.Total fixed costs are constant over the relevant range; per unit fixed costs decrease with production
• D.Total fixed costs increase with production over the relevant range; per unit fixed costs decrease with production

Which of the following is the correct interpretation of a degree of operating leverage (DOL) of 5?

A.An operating leverage of 5 means that if sales increased by 5%, the firm will make the break even point.

• B.An operating leverage of 5 means that current sales can decrease by 5% before the company will hit its break even point
• C.An operating leverage of 5 means that if sales increase by 3%, the operating income will increase by 15%.
• D.An operating leverage of 5 means the company needs to increase sales by 5 times to get to break even.