ECONOMICS

Detailed explanation-1: -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.

Detailed explanation-2: -Fixed costs do not change with increases/decreases in units of production volume, while variable costs fluctuate with the volume of units of production. Fixed and variable costs are key terms in managerial accounting, used in various forms of analysis of financial statements.

Detailed explanation-3: -The relevant range of operations is the normal operating range for a business, with existing machinery. On a per unit basis, as the level of production changes the fixed cost per unit of output decreases as volume increases (and vice versa).

Detailed explanation-4: -Answer and Explanation: b) False, as the volume increases, fixed cost per unit of output will fall. Variable costs are those that are a portion of the price per unit and remain the same per unit as volume increases.

Detailed explanation-5: -Total fixed costs. Total fixed costs do not change even when volume changes. Thus, an increase in volume will leave the total fixed cost unchanged.