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Costing - Phase (I & II) Overview of Cost and Management Accounting

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Fixed cost per unit …………………… with rise in output and …………… with fall in output.

Decreases, increases

Increases, decreases

Is constant, remains same

None of the above

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Explanation:

Fixed costs mean costs, the total amount of which remains fixed for a given time period. Fixed costs do not increase or decrease in total amount when the volume of output changes but fixed cost per unit increases when volume of production decreases and decreases when the volume of production increases like rent, property tax etc.