If production volume increases from 8,000 to 10,000 units,
A)total costs will increase by 20 per cent.
B)total costs will increase by 25 per cent.
C)total variable costs will increase by 25 per cent.
D)mixed and variable costs will increase by 25 per cent.

Question

Quizplus · Accepted Answer

Total costs would not necessarily increase by a percentage, as fixed costs would remain the same. However, total variable costs would increase by 25 per cent due to the increase in production volume. The other options are incorrect.

If Production Volume Increases from 8,000 to 10,000 Units