Question

Which of the following production costs, if expressed on a per unit basis, would be most likely to change significantly as the production level varies?
a. Variable costs.
b. Direct materials.
c. Direct labor.
d. Fixed manufacturing overhead.

Answer 1

Answer:

d. Fixed manufacturing overhead.

Explanation:

As we know that

The variable cost would remain the same in case of per unit while it could be changed in values while the fixed cost would remain the same in case of values but could be changed in per unit

But in case of the fixed manufacturing overhead, if the production level varies so it changes significantly and the direct material + direct labor are the direct cost

So the correct option is d.