Question

Last year, gordon company sold 20,000 units of its only product. if sales increase by 20% in the current year, how will unit variable cost and total fixed cost be affected? unit variable cost total fixed cost
a.remains constant remains constant
b.increases decreases
c.decreases remains constant
d.remains constant decreases
e.remains constant increases

Answer 1

With the information given above, taking into account the sales of the previous year ($20,000) and assuming that the sales for this current year will go up by 20%, the total variable cost will decrease and the total fixed cost will remain constant.