For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to _ costs if the level of activity at Jinan is ___.

Question

07-04-2020
Business

contestada

For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to _ costs if the level of activity at Jinan is ___.

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adioabiola adioabiola · Answer 1 · 2020-04-10T05:08:08+02:00

Answer:

Fixed; decreasing

Explanation:

Cost per unit is the amount of money used to produce a unit of a product.

Cost per unit= Total cost/total number of units produced

Total cost(TC) is the cost of fixed and variable cost used in production.

TC=FC+VC

Fixed cost (FC) is the cost that doesn't change during production, that is, they remain constant. Examples are buildings, machineries.

Variable cost(VC) are cost that changes with production such as cost of labor, cost of material.

This cost per unit increase

of Jinan corporation may be due to fixed costs if the level of activity at Jinan is decreasing.

An increase in cost per unit when total cost is stable is caused by fixed cost if the level of activity is decreasing.

*When activity level decrease, it means less variable cost is used in production but fixed cost remain the same which may cause increase in the output per unit.

For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to _____________ costs if the level of activity at Jinan is _______________.

Respuesta :

Otras preguntas

For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to _ costs if the level of activity at Jinan is ___.