What will happen to the rental cost per unit of production as production levels increase? The rental cost per unit of production will:

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 5DQ
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Consider a company that rents a building for £500,000 a year for the purpose of manufacturing between 100,000 and 120,000 units of production (the relevant range of activity). What will happen to the rental cost per unit of production as production levels increase? The rental cost per unit of production will:

a. Behave in a non-linear fashion b. Increase
c. Decrease
d. Remain fixed

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