Final answer:
The statement is true, costs are recorded in the Manufacturing Overhead Control account. The average fixed cost curve is a hyperbola that demonstrates the decrease in cost per unit as production increases. 'Spreading the overhead' refers to distributing fixed costs across more units, reducing the average cost per unit.
Step-by-step explanation:
The statement that the actual costs of all individual overhead categories are recorded in the Manufacturing Overhead Control account is true. In accounting, the overhead control account is used to accumulate the actual indirect costs that occur during the production process. This includes items such as factory rent, utilities, and indirect labor. Now, concerning average fixed costs, if we suppose the fixed cost is $1,000, the average fixed cost curve would appear as a hyperbola when plotted on a graph. This is because as the quantity of output increases, the $1,000 fixed cost is spread out over more units, leading to a decrease in the average fixed cost per unit.
"Spreading the overhead" refers to allocating the total fixed costs over the increasing quantities of output produced. As more products are made, the fixed cost per product diminishes, since the same amount of overhead ($1,000 in our example) is being spread over a larger number of units. This concept is crucial for businesses to understand when making decisions on pricing, budgeting, and scaling production levels.