The fixed cost per local call decreases as more local calls are made. Exh. If variable cost per unit is constant, And fixed cost per unit decreases with increases in activity, Then total cost per unit decreases with increased activity as well. Significance? As you get closer to plant capacity, your costs per unit are as low as they can be within that relevant range. Thus, your goal is to maximize through-put in your plant Result? Why is it that companies like Applied Materials and Cisco have so much cash flow during a period of low income?
The fixed cost per local call decreases as more local calls are made.
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