Asked by Brandon Schaffer on Jun 09, 2024
Verified
Fixed costs per unit decrease proportionately with increases in volume of activity.
Fixed Costs
Fixed expenditures that are unaffected by the amount of goods produced or sold, covering rent, salaries, and insurance.
Volume Of Activity
A term often used in cost accounting to denote the amount of production or the level of sales of a company during a specific period.
- Acquire knowledge on the dynamics and ramifications of cost behavior regarding per unit and aggregate cost.
Verified Answer
MG
Moura GhaziriJun 12, 2024
Final Answer :
True
Explanation :
As the volume of activity increases, the same fixed costs are spread over more units, resulting in a lower fixed cost per unit.
Learning Objectives
- Acquire knowledge on the dynamics and ramifications of cost behavior regarding per unit and aggregate cost.
Related questions
While the Total Amount of Variable Cost Changes with the ...
As Production Volume Increases,fixed Cost Per Unit of Output Remains ...
While the Total Amount of Fixed Cost Remains Constant with ...
Total Fixed Costs Change as the Level of Activity Changes
In Activity-Based Costing Analysis, Package Design Is Classified as A ...