Answered: Fixed cost per unit of output decreases…

Business

Accounting

Fixed cost per unit of output decreases as volume increases. True or False True False

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Fixed cost per unit of output decreases as volume
increases.
True or False
True
False

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Which of the following is true of fixed and variable costs? Volume changes will not change the relationship between fixed and variable costs. Fixed costs are fixed in total, but vary per unit; variable costs vary in total, but are fixed per unit. As sales increase, the contribution margin percentage increases. O The relationship between sales, variable costs, and the contribution margin does not change when the sales price per unit changes. The contribution margin is what remains after fixed costs have been subtracted from total sales.
1. If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), Using Break Even Analysis, provide a unique mathematical example to support the break even point decreasing
Variable costs and fixed costs can best be described by which of the following when production levels decrease? Total fixed costs decrease, but fixed costs per unit stay constant. Fixed costs per unit stay constant, but variable costs per unit decrease. Fixed costs per unit increase, but variable costs per unit stay constant. Total variable costs stay constant , but variable costs per unit decrease .
Break-even analysis assumes over the relevant range that Group of answer choices total variable costs are linear. fixed costs per unit are constant. total variable costs are nonlinear. total revenue is nonlinear.
In the fixed cost per unit does the it increase as activity decreases and will decrease as activity increases?
What effect does an increase in sales price have on contribution margin? An increase in fixed costs? An increase in variable costs?
As the level of activity increases, how will a mixed cost in total and per unit behave? A) B) (C) D) E) In Total Increase Increase Increase Decrease Decrease Multiple Choice Choice A Choice B Choice C Choice D Per Unit Decrease Increase No effect Increase No effect
Increasing variable cost while decreasing fixed cost