BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -When making decisions using fixed costs, the focus should be on total costs and not unit costs. False.

Detailed explanation-2: -It would not be the fixed costs related to the operations that cannot be altered and will not change with the level of production. Therefore, in most straightforward instances, fixed costs are not relevant for production decision, and incremental costs, or variable costs, are relevant for these decisions.

Detailed explanation-3: -Fixed costs increase in total as production increases and remain constant on a per unit basis.

Detailed explanation-4: -Answer and Explanation: The correct option is c. The fixed cost per unit decreases when volume increases.

Detailed explanation-5: -Fixed costs do not vary with the production level. Total fixed costs remain the same, within the relevant range. However, the fixed cost per unit decreases as production increases, because the same fixed costs are spread over more units.