Asked by Charol Pelagio on Jul 13, 2024
Verified
Within the relevant range, a difference between variable costs and fixed costs is:
A) variable costs per unit fluctuate and fixed costs per unit remain constant.
B) variable costs per unit are constant and fixed costs per unit fluctuate.
C) both total variable costs and total fixed costs are constant.
D) both total variable costs and total fixed costs fluctuate.
Variable Costs
Costs that change in proportion to the level of production activity or volume, such as materials and labor directly involved in production.
Fixed Costs
Expenses that remain constant regardless of production or sales volume in the short term, like lease payments or wages.
Relevant Range
The range of activity within which the assumptions about cost behavior hold true for a specific operation or business.
- Differentiate between variable and fixed costs, including their behavior within the relevant range.
Verified Answer
Learning Objectives
- Differentiate between variable and fixed costs, including their behavior within the relevant range.
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