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For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold?

1) Variable
2) Fixed

1 Answer

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Final answer:

Costs are classified into variable costs, which vary with production levels, and fixed costs, which remain constant. Average cost, average variable cost, variable costs, and marginal cost are measured on a per-unit basis. Production technology is the mix of inputs used to produce goods or services.

Step-by-step explanation:

When considering the cost types concerning the number of units produced and sold, they can be classified as either variable costs or fixed costs. Variable costs fluctuate with the level of production output. For example, if a company produces more units, the cost for materials and labor will generally increase proportionately. These are the costs that are directly associated with the production of goods. On the other hand, fixed costs remain constant regardless of the amount of production. These might include the rent for a factory or lease payments which do not change with the number of units produced.

Regarding the costs measured on a per-unit basis, average cost, average variable cost, variable costs, and marginal cost are typically assessed on this basis. Fixed costs can also be averaged per unit, but they do not change with the level of production. Production technology refers to the combination of resources, equipment, and labor that a company uses to produce goods or services.

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