Question

The analysis of the fixed cost volume variance focuses on how volume affects fixed cost per unit. This statement is?

1) True
2) False

Answer 1

The analysis of fixed cost volume variance focuses on how volume affects the total fixed costs, not fixed cost per unit.

Step-by-step explanation:

The statement is False. The analysis of fixed cost volume variance focuses on how volume affects the total fixed costs, not fixed cost per unit. Fixed costs do not change on a per-unit basis because they remain constant regardless of the level of production. For example, if a company has $1,000 in fixed costs and produces 100 units, the fixed cost per unit would be $10. If the company produces 200 units, the fixed cost per unit would still be $10.