Select the correct statement regarding fixed costs.
A) Because they do not change, fixed costs should be ignored in decision making.
B) The fixed cost per unit decreases when volume increases.
C) The fixed cost per unit increases when volume increases.
D) The fixed cost per unit does not change when volume decreases.

Question

Quizplus · Accepted Answer

Fixed costs remain constant in total, but the fixed cost per unit decreases as the volume of production or sales increases, because the same amount of fixed costs is spread over more units.

Select the Correct Statement Regarding Fixed Costs