Question

Which of the following is true if the volume of sales increases​ (within a relevant​ range)? A. total fixed cost increases B. total variable cost decreases C. total variable cost increases D. total fixed cost decreases

Answer 1

Answer:

C. total variable cost increases

Explanation:

Fixed cost, as the name states, do not change with a variation on production output, therefore an increase in the sales volume does not change the fixed cost. Meanwhile, variable cost is the cost associated with the production of each unit, and thus depends on the sales volume. An increase in the volume of sales leads to an increase in total variable cost.

Therefore, the answer is C.