mirror company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold. if the company's volume doubles, the total cost per unit will: a. stay the same. b. decrease. c. double as well. d. increase but will not double.

Respuesta :

The appropriate choice is option (b). If the business doubles its volume, the overall cost per unit will go down.

How does volume affect the fixed cost per unit?

Fixed costs are not affected by the volume of output. Within the appropriate range, the total fixed costs stay constant. However, as output rises, the fixed cost per unit falls since the same fixed costs are shared over more units.

How does volume affect the variable cost per unit?

Per unit produced, the variable cost of production is a fixed sum. Variable costs will rise as output and production volume do as well. On the other hand, the variable costs related to production will therefore go down if fewer products are created.

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