Fast Photo operates four film developing plants in upstate New York. The four plants are identical. They employ the same production technology, process the same mix, and buy raw materials from the same companies at the same prices. Wage rates are also the same at four plants. In reviewing the operating results for November, the newly hired assistant controller, Matt Mays, became quite confused over the numbers.

Matt remembered from his Managerial Accounting class that as volume increases, the average fixed cost per unit falls, and so Matt expected Plant D to be more profitable that Plants A and B. But numbers show just the opposite.