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Which of the following is correct for fixed costs. a. Fixed cost does not change with volume but varies per unit of output. b. Fixed cost changes with volume as well as per unit of output. c. Fixed cost does not change either with volume or per unit of output. d. Fixed cost varies with volume and remains fixed per unit of output.
A : is the correct Answer.
Fixed cost does not change with change in volume. But fixed cost per unit of output can change as the volume change.
Fixed cost is the cost that remains constant in total but varies in per unit. It is the total fixed cost that you must pay regardless of weather you produce some thing or not. However, its per unit cost (fixed costs per unit) will change as the out put volume changes.
Thus, Choice A is the answer for your question
a. Fixed cost does not change with volume but varies per unit of output.
