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    Fixed and variable costs

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    As I understand it, costs such as the salary of the vice president of transportation operations are variable because the more traffic you handle, the less your unit cost. In contrast, costs such as fuel are fixed because each ton-mile should entail consumption of the same amount of fuel and hence bear the same unit cost." Do you agree? Explain. Assume that the fuel cost for a ton mile is the same regardless of the type of vehicle as well as daily changes in the price of fuel at the pump.

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    One cannot with the statement. Salary of the vice president is fixed and not variable. Imagine there is strike in the company. That means no business for days till the strike ends. But ...

    Solution Summary

    The solution discusses what can be acertained as fixed cost?