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Costs that vary per unit but remain constant in total are:Question 4Select one:a.variable costsb.fixed costsc.incremental costsd.opportunity costs

Question

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Solution

Break Down the Problem

  1. Identify the types of costs given in the options.
  2. Understand the definitions of each type of cost to determine which one fits the description.

Relevant Concepts

  1. Variable Costs: Costs that change per unit but remain constant in total when viewed over a specific range of production.
  2. Fixed Costs: Costs that do not change with the level of output; remain constant in total regardless of the number of units produced.
  3. Incremental Costs: Costs that represent the additional costs incurred when producing one more unit.
  4. Opportunity Costs: The potential benefit lost when one alternative is chosen over another.

Analysis and Detail

  • Variable Costs: These costs can change based on the number of units produced; for example, the cost of materials may increase as production increases.
  • Fixed Costs: These costs remain static regardless of the production level, such as rent or salaries.
  • Incremental Costs: These typically relate to decisions about increasing production and do not apply to the total cost remaining constant.
  • Opportunity Costs: Not directly related to the costs of production but rather refer to the lost benefit of the next best alternative.

Verify and Summarize

Only variable costs change per unit when production varies, while the total remains constant over specific quantities. Fixed costs do not fit the description provided due to their unchanging total nature.

Final Answer

The correct answer is a. variable costs.

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