Which of the following statements is true?
A) Fixed costs should always be unitized as this would result in a better decision.
B) Unit costs need not be computed on the same volume basis.
C) Unit cost data are always more relevant than total cost data.
D) Unit cost changes with volume of activity, and therefore this fact must be considered in decision making.

Question

Quizplus · Accepted Answer

Unit cost changes with volume of activity, so it must be considered when making decisions. Choices A and C are incorrect because fixed costs cannot always be unitized, and total cost data can be just as relevant as unit cost data. Choice B is incorrect because unit costs should always be computed on the same volume basis to make comparisons valid.

Which of the Following Statements Is True