Asked by KAREN NOELIA PINEDA on May 18, 2024
Verified
Which of the following describes the behavior of the fixed cost per unit?
A) decreases with increasing production
B) decreases with decreasing production
C) remains constant with changes in production
D) increases with increasing production
Fixed Cost Per Unit
The total fixed costs of production divided by the number of units produced, decreasing as production volume increases.
- Gain an understanding of cost variability due to shifts in production and sales volumes.
Verified Answer
SN
Shubham NayakMay 21, 2024
Final Answer :
A
Explanation :
Fixed cost per unit decreases with increasing production because the total fixed costs are spread over more units, reducing the cost per unit.
Learning Objectives
- Gain an understanding of cost variability due to shifts in production and sales volumes.