Asked by Jason Carbonetti on May 29, 2024
Verified
As activity decreases within the relevant range, fixed costs remain constant on a per unit basis.
Fixed Costs
Expenses that do not change with production volume, remaining constant regardless of business activity level.
Relevant Range
The span of activity or volume in which the assumptions about fixed and variable cost behavior remain valid.
- Distinguish between fixed and variable costs and their behavior in relation to changes in production volume.
Verified Answer
JW
Jordan WillettMay 30, 2024
Final Answer :
False
Explanation :
Fixed costs remain constant in total, but on a per unit basis, they increase as activity decreases within the relevant range.
Learning Objectives
- Distinguish between fixed and variable costs and their behavior in relation to changes in production volume.
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