The Simple Manufacturing Company produces a single product. To produce this product, the company incurs two types of cost: fixed and variable cost. It is now February i.e., early in the current year. The previous years cost and output volume information is available to management but the current years information is not yet available. The company expects the following in the current year:

• Total cost is expected to increase compared to the previous year
• Variable cost per unit of output is expected to increase compared to the previous year
• Total fixed cost is expected to remain the same compared to the previous year

Which of the following statements is / are true given the above expectations?

1. It is possible that the company expects its output volume in the current year to increase compared to the previous year
2. It is possible that the company expects its output volume in the current year to decrease compared to the previous year
3. It is possible that the company expects its output volume in the current year to stay the same as the previous year

Group of answer choices

A. Statement 1 only

B. Statement 2 only

C. Statement 3 only

D. Statement 1 and 2 only

E. Statement 1, 2 and 3