Generally,managers use total costs rather than unit costs because total costs are easier to work with and reduce the chance for erroneous conclusions.

Question

Quizplus · Accepted Answer

Total costs take into account all of the costs associated with a project or product, including fixed and variable costs, whereas unit costs only consider the cost per unit produced. Total costs provide a more accurate representation of the overall financial impact of a project or product, making them a preferred metric for decision making. Additionally, using unit costs alone can be misleading if production volumes are expected to fluctuate or if fixed costs are significant components of the total cost structure.

Generally,managers Use Total Costs Rather Than Unit Costs Because Total