QUESTION 1 When production levels are expected to increase w

QUESTION 1 When production levels are expected to increase within a relevant range, and a flexible budget is used, what effects would be anticipated with respect to each of the following Fixed Costs rable Costs Per Unit Decrease Decrease No Change O No Change Per Unit Increase No Change No Change ncrease

Solution

B.

Fixed cost per unit decreases with increase in production levels.

Variable costs per unit are a constant amount and they don\'t change with respect to production levels.

Fixed costs per unit	Variable costs per unit
Decrease	No change