If the activity level increases one would expect the fixed c

If the activity level increases, one would expect the fixed cost per unit to: A. Increase. B. Decrease. C. Remain unchanged. D. None of the above.

Solution

Fixed is always fixed but fixed cost per unit can be increase or decrease accordingly activity level.

so if activity level decrease fixed cost per unit should be increased.

but if activity level increase fixed cost per unit should be decrease.

so answer is b) Decrease