As production increases, what should you expect to happen to the fixed costs per unit?
A) Increase
B) Decrease
C) Remain the same
D) Either increase or decrease, depending on the variable cost

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with the level of production. As production increases, total fixed costs remain the same, but are spread out over a larger number of units, leading to a decrease in fixed costs per unit.

As Production Increases, What Should You Expect to Happen to the Fixed