I need this EXPLAINED to me. I have a final exam today for an overview accounting course that I have been struggling through.
The normal production range for BobCat Inc. is from 100 to 200 units. During the previous month, the production level was 140; during the current month, the production level is 110.
The total fixed cost has
The average fixed cost per unit has
The total variable cost has
The average variable cost per unit has
Decreased (D) Increased (I) Stayed the same (SS) Cannot be determined (CND)
Total Fixed Cost - Stayed the Same Average Fixed... View the full answer
- Can I assume that in any given example that the average fixed will increase due to lower production and that the total variable cost will decrease proportionally to production?
- May 05, 2018 at 8:18am
- Yes that is true unless there is any specific information given regarding the cost
- May 05, 2018 at 8:19am
- Perfect, thank you!
- May 05, 2018 at 8:20am
- One last question, if the change in per unit cost were to decrease, would the average variable cost decrease or increase?
- May 05, 2018 at 8:30am
- Average variable cost will decrease because average variable cost has got nothing to do with Total Variable cost. It is basically per unit cost of production only
- May 05, 2018 at 8:35am