{"id":46737,"date":"2024-04-15T22:16:41","date_gmt":"2024-04-15T22:16:41","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=46737"},"modified":"2024-04-15T22:16:41","modified_gmt":"2024-04-15T22:16:41","slug":"in-increasing-production-volume-situation-the-behaviour-of-fixed-cost-will-be-and-variable-cost-will","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-increasing-production-volume-situation-the-behaviour-of-fixed-cost-will-be-and-variable-cost-will\/","title":{"rendered":"In increasing production volume situation, the behaviour of fixed cost will be . . . . . . . . and variable cost will . . . . . . . ."},"content":{"rendered":"

[amp_mcq option1=”decreases, increases” option2=”increase, decreasing” option3=”constant, increase” option4=”increase, constant” correct=”option3″]<\/p>\n

The correct answer is: C. constant, increase<\/p>\n

Fixed costs are costs that do not change with the level of production. For example, rent, insurance, and depreciation are all fixed costs. Variable costs are costs that change with the level of production. For example, the cost of raw materials and labor are both variable costs.<\/p>\n

In an increasing production volume situation, fixed costs will remain constant. This is because fixed costs are not affected by the level of production. Variable costs, on the other hand, will increase as production increases. This is because the cost of raw materials and labor will increase as more products are produced.<\/p>\n

Here is a more detailed explanation of each option:<\/p>\n