How do fixed costs react in total and on a per unit basis?
A)Fixed costs remain constant in total and decrease per unit as production increases.
B)Fixed costs remain constant in total and on a per unit basis as production increases.
C)Fixed costs increase in total as production increases and remain constant on a per unit basis.
D)Fixed costs increase in total and on a per until basis.

Question

Quizplus · Accepted Answer

Fixed costs do not change in total as production levels change; they remain constant. However, on a per unit basis, fixed costs decrease as production increases because the same total fixed costs are spread over more units.

How Do Fixed Costs React in Total and on a Per