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As you are discussing next years forecasted sales for one of your firms main products with a subordinate, you note that as production volume increases,
As you are discussing next years forecasted sales for one of your firms main products with a subordinate, you note that as production volume increases, the average manufacturing cost per unit decreases. Your subordinate asks why that is the case. You respond that average cost per unit decreases because:
A. Total fixed costs stay the same. B. Total variable costs stay the same. C. Total fixed costs increase. D. Total variable costs increase.
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