If at a given volume total costs and fixed costs are known, the variable costs per unit may be computed as follows:
A) (total costs − fixed costs) / unit volume
B) (total costs / unit volume) − fixed costs
C) (total costs × unit volume) − (fixed costs / unit volume)
D) total costs − (fixed costs / unit volume)

Question

Quizplus · Accepted Answer

Variable costs per unit can be calculated by subtracting fixed costs from total costs and then dividing by the unit volume. This isolates the cost that varies with production from the overall costs.

If at a Given Volume Total Costs and Fixed Costs