Variable costs per unit remain unchanged with levels of production.

Question

Quizplus · Accepted Answer

Variable costs are expenses that vary in direct proportion to production or sales volume, such as raw materials or labor costs. They are considered to be "per unit" because they are typically measured on a per-unit basis, i.e., the cost per unit of raw materials or the cost per hour of labor. Since variable costs per unit remain unchanged with levels of production, the total variable costs increase or decrease depending on the level of production. This is because the same cost per unit is applied to each unit of production, regardless of the volume produced.

Variable Costs Per Unit Remain Unchanged with Levels of Production