COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
|
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: -A variable cost is a cost that varies in relation to changes in the volume of activity. A variable cost increases as the level of activity increases; for example, the total cost of direct materials goes up in conjunction with increases in production volume.
Detailed explanation-4: -c. varies in direct proportion with the activity level. This is the correct option. If a variable cost is $50, 000 when 10, 000 units are produced, it will be $100, 000 when 20, 000 units are produced.
Detailed explanation-5: -Answer and Explanation: The correct option is c. The fixed cost per unit decreases when volume increases.