Asked by Tanushri Sarkar on May 26, 2024
Verified
As production increases, variable costs per unit
A) stay the same
B) increase
C) decrease
D) either increase or decrease, depending on the fixed costs
Variable Costs
Expenses that vary directly with changes in production or sales volumes, such as raw materials and direct labor costs.
Production Increases
A rise in the amount of goods and services produced over a given period of time by a business or economy.
- Identify the behavior of variable costs per unit with changes in production levels.
Verified Answer
MM
Marlon MieresMay 30, 2024
Final Answer :
A
Explanation :
Variable costs per unit stay the same as production increases. These costs vary directly with the level of production, but on a per-unit basis, they remain constant. Fixed costs, on the other hand, are spread over more units with increased production, affecting the per-unit cost, but this does not apply to variable costs.
Learning Objectives
- Identify the behavior of variable costs per unit with changes in production levels.
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