What will be the result if production volume increases from 4,000 to 5,000 units?
A) Total costs will increase by 20%.
B) Total costs will increase by 25%.
C) Total variable costs will increase by 25%.
D) Mixed and variable costs will increase by 25%.

Question

Quizplus · Accepted Answer

If the production volume increases from 4,000 to 5,000 units, the total variable costs will increase in proportion to the increase in production volume. Therefore, the correct answer is C. The other options are incorrect as they do not accurately reflect the impact of an increase in production volume on total costs or costs of production.

What Will Be the Result If Production Volume Increases from 4,000