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What is the difference between variable costs and fixed costs ?

A. Variable costs per unit fluctuate and fixed costs

per unit remain constant.

B. Variable costs per unit are fixed over the

relevant range and fixed costs per unit are

variable.

C. Total variable costs are variable over the

relevant range and fixed in the long term, while

fixed costs never change.

D. Variable costs per unit change in varying

increments, while fixed costs per unit change

in equal increments.

user-image
Question added by Moataz Elsabawy , مدير مالى , مجموعه شركات الانصار
Date Posted: 2017/02/13
Muhammad Kassab  CPA CMA CertIFR
by Muhammad Kassab CPA CMA CertIFR , Accounting Manager , Marine Buildings Landmarks

B : Variable costs per unit are fixed over the relevant range, and fixed costs per unit are variable.

fixed costs are fixed in total over the relevant range, that's why the more units produced the less a unit has to bare of these fixed costs, meaning fixed cost PER UNIT decreases when production level increases.

While variable costs IN TOTAL increases if production level is increased, and decreases if production level is decreased, they are called variable because they change with production level, this change is fixed per unit.

 

هيثم ناجى
by هيثم ناجى , محاسب اول , الفيوم لصناعة السكر

 

  • B. Variable costs per unit are fixed over the

    relevant range and fixed costs per unit are

    variable.

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