D. suppose that the increase in input price does not occur but, instead, that productivity increases by 25% percent. what would be the new per-unit cost of production?

decreased by 20%

Explanation:

Supposed we have input price of $30,000 and it produced an output of 300 units on the first year of operation. The cost per unit on the first year is $100 each ($30,000/300).

On the second year we still have the same input expense of $30,000 but the productivity output increased by 25%. So we have 375 units produced on the second year’s operation. The new cost per unit would be $30,000/375=$80 per unit.

Therefore we conclude that based on the example given, the new unit cost per product decreases by 20%.

$100-80 = $20

$20/$100 = 20%

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.

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