Question

Which one of the following statements is not true? Group of answer choices Total fixed costs remain the same regardless of volume within the relevant range. Total variable costs change with volume. Variable costs per unit remain the same regardless of the volume. Total variable costs decrease as the volume increases. Fixed costs per unit increase as the volume decreases.

Answer 1

Answer:

The correct answer is letter "D": Total variable costs decrease as the volume increases.

Explanation:

Total fixed costs are those that do not vary when the volume of production changes. However, unitary fixed costs change with fluctuations in production. As production increases, unitary fixed costs decrease and if production decreases unitary fixed costs increase.

Also, unitary variable costs remain the same in front of changes in output but total variable costs change directly proportional to variations in production. It means if the volume in production increase so will total variable costs and vice versa.