Alpha Manufacturing produces a unique valve and has the capacity to produce 50,000 valves annually. Currently, Atlas produces 40,000 valves and is thinking about increasing production to 45,000 valves next year. What is the most likely behaviour of total manufacturing costs and unit manufacturing costs given this change?

	a.	Total manufacturing cost will increase and unit manufacturing cost will stay the same.
	b.	Total manufacturing cost will increase and unit manufacturing cost will decrease.
	c.	Total manufacturing cost will stay the same and unit manufacturing cost will stay the same.
	d.	Total manufacturing cost will increase and unit manufacturing cost will also increase.
	e.	None of the answers.

Answer rating: 100% (QA)

Correct answer Total manufacturing costs will increase and uni... View the full answer