ECONOMICS

Detailed explanation-1: -The statement is TRUE. A variable cost is a cost like direct materials that remain the same per unit regardless of how many units are manufactured. This means that the total cost increases as the number of units produced increase and decrease as the number of units decreases.

Detailed explanation-2: -Variable cost per unit refers to the cost of production of each unit produced in the company, which changes when the volume of the output or the level of the activity changes in the organization, and these are not the committed costs.

Detailed explanation-3: -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.