Within the relevant range, variable costs can be expected to:

a. increase on a per unit basis as the activity level decreases.

b. remain constant in total as the activity level changes.

c. vary in total in direct proportion to changes in the activity leve

d. increase on a per unit basis as the activity level increases.

Question

Business

Aubrie Pugh

9 September, 14:37

Within the relevant range, variable costs can be expected to:

a. increase on a per unit basis as the activity level decreases.

b. remain constant in total as the activity level changes.

c. vary in total in direct proportion to changes in the activity leve

d. increase on a per unit basis as the activity level increases.

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Answers (1)

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Marlee Koch · Answer 1

C. Vary in total in direct proportion to changes in the activity level.

Explanation:

Within a relevant angle, it is explained to vary in total in direct proportion to changes in the activity level.

Firstly, a variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company's production volume; they rise as production increases and fall as production decreases.

A variable cost is a corporate expense that changes in proportion with production output.

Whether a firm makes sales or not, it must pay its fixed costs, as these costs are independent of output.