Asked by
Samantha Conway
on Nov 12, 2024
Verified
Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behaviour patterns remain unchanged the?
A) total variable cost will remain unchanged.
B) total cost per unit will decrease.
C) fixed costs will increase in total.
D) variable cost per unit will increase.
Variable Costs
Expenses that vary directly with levels of production or sales volume.
Cost Behaviour
The way in which costs change or remain stable in relation to variations in business activity levels, categorized into fixed, variable, and mixed costs.
Total Unit Costs
The complete cost incurred to produce, store, and sell one unit of a product, including direct materials, labor, and overhead.
- Understand cost behavior and how costs are affected by changes in activity level.
Verified Answer
LH
Learning Objectives
- Understand cost behavior and how costs are affected by changes in activity level.