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can fixed costs in total change as it move to a new relevant range?

can fixed costs in total change as it move to a new relevant range?
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Answer #1

Answer: No Change in Fixed cost.

Explaination:

Based on activity, fixed cost do not change.The cost will stay the same in total as long as activity is within the relevant range. However, the fixed cost per unit decreased as production increases because same fixed cost are spread over more units.

Example:

If Fixed cost = $50,000

Current Production: 6000 Units.

Plant capacity: 12000 units.

For Producing 12000 units there will be no change in Fixed cost as it will be remain same if they produce/manufacture 6000 Units or 12000 Units.

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