If the production is increased to 300 vases, what will happen to Fixed cost per unit?

Option 1 -> Incorrect. Variable costs increase with production, but total fixed costs remain constant regardless of production volume.

Option 2 -> Incorrect. Total fixed costs remain unchanged; they do not increase with production levels.

Option 3 -> Incorrect. While total fixed cost remains constant, fixed cost per unit changes when production volume changes.

Option 4 -> Correct. Fixed cost per unit decreases as production increases.

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Hence, Option 4: Fixed cost will decrease -> When production increases to 300 vases, the fixed cost per unit decreases because total fixed costs (like rent, salaries, depreciation) remain constant but are now spread over more units. For example, if total fixed cost is 3,000 and production increases from 100 to 300 vases, fixed cost per unit drops from \30/unit to $10/unit. This is the fundamental concept of economies of scale in cost accounting. -> correct