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Fact 11.2.1 GM to Cut Production and Jobs
General Motors will temporarily idle five U.S.assembly plants that build sedans and coupes,such as the Chevrolet Cruze,Cadillac CTS,and Chevy Camaro,as American motorists by the millions shift from passenger cars to utility vehicles and other light trucks.
Source: The Toronto Star,December 21,2016
-Refer to Fact 11.2.1.The shutdown decision ________ total fixed cost and ________ total variable cost.

Question

Quizplus · Accepted Answer

Total fixed costs remain unchanged because they are not affected by production levels, while total variable costs decrease due to the reduction in production.

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