Question

ASSERTION: Variable costs are fixed per unit but vary in total.

REASONING: Variable costs decrease with Increase in the volume of output.

Options

• A is true, and R is the correct explanation for A.

• A is true, and R is not the correct explanation for A.

• A is true, but R is false.

• A is false, but R is true.

Answer 1

A is true, but R is false.

Explanation:

• A is true because variable cost is constant per unit but changes in total as output changes.
• R is false because variable costs (total) increase with higher output; they do not decrease when volume rises.