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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Budgeting
good morning Mr John Moffat.
Little question: Do the FC always change as to the Level of Production? Or it depends is the budget at full capacity, practical capacity or basic capacity? If its at full, extra unit causes extra Fixed costs, if its practical and basic it doesnt up to the certain point of reaching maximum capacity? Am i right sir? PLease advise more thorough cause i didnt read upon it.
Fixed costs do not change with the level of production unless there is a stepped fixed cost.
Stepped fixed costs are where the cost remains fixed up to a certain level of production but then increases to a new fixed amount once production is higher.