Fixed costs per unit decrease as production levels decrease.

Name: Fixed costs per unit decrease as production levels decrease.
Brand: Quizplus
Rating: 4.8 (38 reviews)

Question

Quizplus · Accepted Answer

Fixed costs are expenses that do not depend on the level of production. Therefore, they remain the same regardless of how much or how little is produced. As production levels decrease, the fixed costs are spread over fewer units, causing the fixed cost per unit to increase.

Fixed Costs Per Unit Decrease as Production Levels Decrease