(3 pts) Franklin Corporation currently produces 30,000 staplers/year in its manufacturing facility. At this level of production, fixed costs are $80,000 and variable costs are $5/unit.

If production were to increase to 40,000 staplers,

1. Fixed costs/unit would remain the same and total variable costs would increase
2. Fixed costs/unit would remain the same and variable costs/unit would decrease
3. Fixed costs/unit would decrease and total variable costs would increase
4. Fixed costs/unit would decrease and variable costs/unit would decrease.