Output Change Affects Cost Components Differently Steps:

• Fixed costs do not vary with output, so total fixed cost stays constant while fixed cost per unit rises with lower output.
• Variable costs vary directly with output, so total variable cost falls but variable cost per unit remains unchanged.
• Compare each to forecast: fixed cost per unit differs (higher actual), total variable cost differs (lower actual), total fixed cost matches, variable cost per unit matches.
• Identify pair that matches forecast: total fixed cost and variable cost per unit.

Why D is correct:

• Total fixed cost is invariant to output volume by definition, and variable cost per unit is a constant rate unaffected by total production level.

Why the others are wrong:

• A: Fixed cost per unit increases; total variable cost decreases.
• B: Total variable cost decreases.
• C: Total variable cost decreases.

Final answer: D