If a Production Facility Increases Its Production by 1,500 Units

question 41

Multiple Choice

If a production facility increases its production by 1,500 units, its:

• A)Variable (unit-level) cost per unit will increase.
• B)Fixed cost per unit will increase.
• C)Total fixed costs will decrease.
• D)Fixed cost per unit will decrease.

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Definitions:

Consolidated Equipment

The aggregate of equipment assets combined from parent and subsidiary entities for the purpose of financial reporting.

Par Value

The face value of a bond or stock as stated by the issuer, which is not indicative of its market value.

Fair Value

An estimate of the market value of an asset or liability, based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership share in a corporation.