Asked by Alvin Sebastian on Jul 21, 2024
Verified
Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite directions.
Unit Variable
A measurement that reflects how variable costs change per unit of production or activity level.
Unit Fixed
This specifies a cost or charge that remains constant per unit regardless of changes in the level of activity or volume of production.
- Grasp the connection between degrees of activity and the fluctuation of variable and fixed costs.
Verified Answer
SJ
Sandra JoshyJul 27, 2024
Final Answer :
False
Explanation :
Unit variable costs remain constant on a per-unit basis regardless of changes in the level of activity, while unit fixed costs change inversely with the level of activity but on a total basis, not on a per-unit basis.
Learning Objectives
- Grasp the connection between degrees of activity and the fluctuation of variable and fixed costs.