ICAEW BIP · Chapter 1 · Question 10 of 10
Within the relevant range of activity, what happens to fixed cost per unit as output increases?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It decreases
Explanation
Total fixed cost stays the same within the relevant range. When the same total is spread over more units, the fixed cost per unit falls. Variable cost per unit is the cost that stays constant as output changes.
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