Answer
a) A decrease in unit fixed costs
b) No effect
c) No effect
d) Increase in the total variable cost
Work Step by Step
a) A fixed cost has an inverse type of relation to the unit volume. If the unit increases, the fixed cost decreased. If the unit decreased, the fixed cost increases
b). Variable costs remain constant in reference to the unit which means that there will be no changes.
c) Total fixed cost also remains constant between a specific range not depending on the volume. In this case, there will be no changes.
d) There is a direct relationship between total variable cost and volume. An increase in the volume will also increase the total variable cost while a decrease in the volume will decrease the total variable cost.
