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Suppose
Variable per unit is $5
Fixed cost $100 for25 unit.
If we produce10 units then
Variable cost is cost per unit is $5
Fixed cost per unit is = (100/10 )= $10
Again
If we produce20 units then
Variable cost is cost per unit is $5
Fixed cost per unit is = (100/20 )= $5.
So variable cost per unit is Fixed but fixed cost per unit is variable( $10 fro10 unit , $5 for20 Unit ).
The fixed is based estimated budgets or standard at particular activity level.for example if the estimated budgeted fixed cost at an100% activity level on production of50,000 units is500,000 if the firm attains the activity level of80% and production is40,000 units then the unit fixed cost is =500,000/40,000 =12.5 if the production increases to50,000 the unit fixed will be decreased =500,000/50,000=10 per unit .The unit fixed cost decreases with increase of production
Conversely the unit variable cost whether material or labour increase or decrease with change in production and but unit cost is fixed which doesn't change as change in production.Because rate of material usage or labour hours required to produce a single are fixed whether to produce produce40,000 units or more.
At any activity(100%) level fixed cost is defined by budgeted figure that's mean when any operational level is made then fixed cost also changes profoundly .So fixed cost per unit is variable.
On the other hand variable cost per unit does always show / consider as fixed where as nothing does pursue to increase or decrease cost per unit. Hence Variable cost per unit is fixed.
Simply we say any operational /activity level does pursue the fixed cost per unit but activity level does not demonstrative change in per unit cost.
