As the level of activity increases, how will a mixed cost in total and per unit behave? In Total Per Unit A) Increase Decrease B) Increase Increase C) Increase No effect D) Decrease Increase E) Decrease No effect

There are different kinds of terms used in business. As the level of activity increases, The Total Per Unit will Increase/ Decrease.

Note that;

In total - Increase

Per Unit - Decrease

Due to the increase in level of activity , the fixed cost per unit is said to decreases.

And due to the above, The total fixed cost is known to remains the same. The Examples of fixed costs are;

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A) Increase Decrease

Explanation:

As we know that

Mixed cost is the combination of both fixed cost and the variable cost

Mixed costs are costs in which one component of cost is Fixed and the other component is variable

In equation form,

Mixed cost = Fixed cost + variable cost

In the case of variable cost, the per unit would remain the same and it increased when production increases

But the fixed cost amount would remain the same  but if the production rises the per unit declines

Similarly, Fixed costs remain the same in Total and decreases per unit with increase in production

Therefore option A is correct

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