The following is a useful rule of thumb when making operational decisions.Managers should NOT use ________.
A) variable cost per unit
B) total variable costs
C) fixed cost per unit
D) total fixed costs

Question

Quizplus · Accepted Answer

Fixed costs remain constant regardless of the number of units produced, therefore fixed cost per unit is not a useful tool for operational decision making. Instead, managers should consider variable cost per unit and total variable costs to assess the cost of producing each unit and the overall cost of production. Total fixed costs are also important to consider, but should not be the only factor in operational decision making.

The Following Is a Useful Rule of Thumb When Making