The principal costs incurred in my current business include fixed costs like rent and utilities, variable costs like materials that fluctuate with production volume, and mixed costs that have both fixed and variable components like payroll. If production volume increased 10%, variable costs per unit would decrease as fixed costs are spread out over more units, while unit fixed costs would remain the same and unit mixed costs would decrease to some extent depending on how much the variable portion increased with production.

1. Describe the principal costs incurred in the business that employs you today, or a prior business,
and then categorize them as fixed, variable, or mixed costs. If the volume of activity increased
10%, what would happen, in general terms, to unit costs for that product or service? 100 words
or more
Solution