Fixed cost per unit increases when _______.
A. variable cost per unit increases
B. variable cost per unit decreases
C. production volume increases
D. production volume decreases
Answer: Option D
Solution(By Examveda Team)
Fixed cost per unit increases when production volume decreases. Total fixed costs remain the same, within the relevant range. However, the fixed cost per unit decreases as production increases, because the same fixed costs are spread over more units.Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
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