Select the incorrect statement regarding fixed and variable costs.
A) Fixed cost per unit remains constant as the number of units increases.
B) Total variable cost is represented by a straight line sloping upward from the origin when total variable cost is graphed versus number of units.
C) The concept of relevant range applies to both fixed costs and variable costs.
D) The terms "fixed" and "variable" refer to the behavior of total cost.

Question

Quizplus · Accepted Answer

The statement "Fixed cost per unit remains constant as the number of units increases" is incorrect because fixed costs remain the same regardless of the number of units produced. Therefore, fixed cost per unit decreases as production volume increases.

Select the Incorrect Statement Regarding Fixed and Variable Costs