Computing fixed costs per unit may result in misleading information.

Name: Computing fixed costs per unit may result in misleading information.
Brand: Quizplus
Rating: 4.9 (37 reviews)

Question

Quizplus · Accepted Answer

Computing fixed costs per unit may result in misleading information because fixed costs do not vary with the level of production output. Therefore, dividing fixed costs by the number of units produced may make the cost per unit appear lower than it actually is. This can lead to inaccurate decisions regarding pricing, production levels, and profitability.

Computing Fixed Costs Per Unit May Result in Misleading Information