Pfeiffer Company incurs both fixed and variable production costs.Assuming the production is within the relevant range,if volume goes up by 25%,then the total costs would ________.
A) increase by 25%
B) remain the same
C) increase by an amount less than 25%
D) decrease by 25%

Question

Quizplus · Accepted Answer

Since Pfeiffer Company has both fixed and variable production costs, as production volume increases, the variable costs will increase proportionately while the fixed costs remain constant. Therefore, the total costs would increase by an amount less than 25%.

Pfeiffer Company Incurs Both Fixed and Variable Production Costs