Fixed costs expressed on a per unit basis:
A) increase with increases in activity.
B) decrease with increases in activity.
C) are not affected by activity.
D) should be ignored in making decisions since they cannot change.

Question

Quizplus · Accepted Answer

Fixed costs per unit decrease as the level of activity increases because the total fixed costs are spread over more units, reducing the cost per unit.

Fixed Costs Expressed on a Per Unit Basis