Per Unit Fixed Costs Change with Changes in Activity

question 3

True/False

Per unit fixed costs change with changes in activity.

---

Definitions:

Conversion Cost

The total cost of converting raw materials into finished goods, combining direct labor and manufacturing overhead.

Direct Materials

Raw materials that can be directly identified and allocated to the production of specific goods or services.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of fully completed units for inventory valuation and cost analysis.

Direct Materials

Raw materials that can be directly associated with the production of a product.