Asked by Caitlin Saalfrank on May 04, 2024
Verified
Within the relevant range, variable costs can be expected to:
A) vary in total in direct proportion to changes in the activity level.
B) remain constant in total as the activity level changes.
C) increase on a per unit basis as the activity level increases.
D) increase on a per unit basis as the activity level decreases.
Variable Costs
Expenditures that fluctuate directly in relation to the amount of goods or services produced.
Relevant Range
The relevant range is a level of activity within which assumptions about variable and fixed cost behaviors are valid, used for budgeting and forecasting.
Activity Level
A measure of the volume of work or operations in a company, influencing variable costs and often used for budgeting and performance evaluation.
- Distinguish between variable and fixed expenses, including how they vary across the applicable range.
Verified Answer
Learning Objectives
- Distinguish between variable and fixed expenses, including how they vary across the applicable range.
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