BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Total FC changes with output.
|
|
|
Per unit FC reduces when output increases.
|
|
|
Total VC does not change with output.
|
|
|
Per unit VC reduces when output increases.
|
Detailed explanation-1: -Fixed costs do not change with increases/decreases in units of production volume, while variable costs fluctuate with the volume of units of production.
Detailed explanation-2: -The correct answer is option B. Fixed costs are constant in total, and variable costs are constant per unit.
Detailed explanation-3: -Fixed cost is referred to as the cost that does not register a change with an increase or decrease in the quantity of goods produced by a firm. Variable cost is referred to as the type of cost that will show variations as per the changes in the levels of production.
Detailed explanation-4: -Option (c): Only discretionary fixed is the correct answer.
Detailed explanation-5: -Answer and Explanation: Explanation: As the level of volume of activity increases, the variable cost per unit remains constant while the total variable cost increases. Variable costs are costs that varies directly with a specific volume of activity such as the number of units produced.