Asked by Daniel Alvarez on May 02, 2024
Verified
Fixed costs expressed on a per unit basis:
A) increase with increases in activity.
B) decrease with increases in activity.
C) are not affected by activity.
D) should be ignored in making decisions since they cannot change.
Fixed Costs
Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, remaining constant over a period.
Per Unit Basis
A method of quantifying costs, revenues, or other financial metrics on the basis of a single unit of production or service.
Activity
A specific task or action that is part of a process or contributes to the completion of a project.
- Calculate the effects of activity level changes on per unit and total fixed costs.
Verified Answer
Learning Objectives
- Calculate the effects of activity level changes on per unit and total fixed costs.
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