Which of the following statements about variable costing is true?
A)As manufacturing output increases, the per-unit manufacturing cost remains constant.
B)As manufacturing output increases, the per-unit manufacturing cost decreases.
C)As manufacturing output increases, the per-unit manufacturing cost increases.
D)As manufacturing output increases, the change in the per-unit manufacturing cost is negated by the change in the per-unit selling cost.

Question

Quizplus · Accepted Answer

Variable costing means that the per-unit manufacturing cost remains constant regardless of the level of production. This is because, under variable costing, only variable costs are allocated to each unit of production, and these costs do not change on a per-unit basis as production levels vary. Fixed costs are treated as period costs and are not allocated to individual units.

Which of the Following Statements About Variable Costing Is True