FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Not Too Much Water, LLC, a manufacturer of orchid pots, incurs only fixed and variable costs in its operations. When 15,000 orchid pots are produced, the company’s
If production is expected to increase, which of the following statements is TRUE?
Select one:
a. The fixed cost per pot will not change; the variable cost per pot will decrease.
b. Total fixed costs will decrease; the variable cost per pot will not change.
c. The fixed cost per pot will decrease; the variable cost per pot will increase.
d. Total fixed costs will remain unchanged; total variable costs will increase.
e. More than one of the above statements is true.
Expert Solution
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Step 1
Variable cost means the cost which vary with the level of output and fixed cost means the cost which remain fixed what ever may be the level of output.
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