When the number of units manufactured increases,the most significant change in unit cost will be reflected as a(n)
A)increase in the fixed element.
B)decrease in the variable element.
C)increase in the mixed element.
D)decrease in the fixed element.

Question

Quizplus · Accepted Answer

When the number of units manufactured increases, the fixed element of cost per unit decreases because fixed costs (such as rent, salaries, and equipment costs) are spread over more units. This does not change the total fixed costs but reduces the cost per unit.

When the Number of Units Manufactured Increases,the Most Significant Change