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Based on the following cost data, what conclusions can you make about the costs of Product A and Product B?

Total Cost
Production: Product A Product B
10 units $100 ?
100 units $1,000 ?
1,000 units $10,000 ?
Unit Cost

Production: Product A Product B
10 units ? $10,000
100 units ? $1,000
1,000 units ? $100

a. Product A and Product B are both variable costs.
b. Product A and Product B are both mixed costs.
c. Product A is a fixed cost and Product B is a variable cost.
d. Product A is a variable cost and Product B is a fixed cost.

Respuesta :

tutordamola

Answer:

The answer is D

Explanation:

Product A is a variable cost because variable cost(inputs) increases(decreases) with increase (decrease) units(output).

Whereas for product B;

Though, fixed cost is fixed across all units of output but as the total output increases, the average fixed cost decreases because the same amount of fixed costs now cover a larger number of output produced.

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