Fixed cost per unit:
A) decreases as production volume decreases.
B) is not affected by changes in the production volume.
C) decreases as production volume increases.
D) increases as production volume increases.

Question

Quizplus · Accepted Answer

Fixed cost per unit decreases as production volume increases because the fixed cost is spread over a larger number of units produced. As a result, the fixed cost per unit decreases with an increase in production volume.

Fixed Cost Per Unit