Question

Which of the following are true about cost behavior within a particular relevant range? (Check all that apply.) Fixed costs per unit decreases as a company produces less units of production. Variable costs per unit increase as a company produces more units of production. The slope of total variable costs is positive over increasing levels of production. Total fixed cost is constant over all units of production.

Answer 1

Answer:

Variable costs per unit increase as a company produces more units of production.Total fixed cost is constant over all units of production.

Explanation:

there is positive relation between variable cost and production, increase in production will increase the cost and vise visa.

there is inverse relation between fix cost and production higher the production lower the fix cost will be apportioned per unit but the total cost will remain the same

Example :

                              Case-1              Case-2

Production            50000              100000

V.Cost 100 p.u          100                  100

Fix Cost                  100000            100000

total cost

Variable cost        5000000          10000000

Fix Cost                  100000             100000

variable cost is increasing due to increase in production in both cases fix cost will remain the same because no matter how many products company produce fix will remain the same.