Fixed costs expressed on a per unit basis
A)will react directly with changes in activity.
B)will react inversely with changes in activity.
C)are not affected by activity.
D)should be ignored in making decisions since they cannot change over the long run.

Question

Quizplus · Accepted Answer

Fixed costs per unit decrease as the level of activity increases, because the total fixed costs are spread over more units, demonstrating an inverse relationship with changes in activity.

Fixed Costs Expressed on a Per Unit Basis