Homework Answers
False
Fixed production costs are constant irrespective of the volume of production. Further, fixed production cost per unit are calculated by dividing the fixed cost by the total units produce, it would go high in case the units decrease.
Eg. Fixed cost of production is $ 100, No of units produced is 8, cost per unit = 100/8 = $ 12.5. If production reduces to 5 units, cost per unit = 100/5 =$20 (increase due to decrease in production)
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