Which of the following is true of unit fixed costs?
A) They decrease in value with an increase in output units.
B) They are used to calculate the contribution margin.
C) They lead to more effective business decisions when compared to total fixed costs.
D) They act as a causal factor for sales that measures the output of an activity.

Question

Quizplus · Accepted Answer

Unit fixed costs, also known as fixed costs per unit, decrease in value as the number of output units increases. This is because the fixed costs are spread over a larger number of units, reducing the fixed cost per unit.

Which of the Following Is True of Unit Fixed Costs