Which costs will change with a decrease in activity within the relevant range? a

Accounting Aug 21, 2020

Which costs will change with a decrease in activity within the relevant range?

a.Total fixed costs and total variable costs

b.Unit fixed cost and total variable costs

c.Unit variable cost and unit fixed cost

d.Unit fixed cost and total fixed costs

Expert Solution

Unit fixed cost and total variable costs will change with a decrease in activity within the relevant range.

If the level of activity decreases within the relevant range then the fixed cost per unit will increase and total variable costs will decrease. Total fixed costs do not change with the relevant range.

Correct option is b). Unit fixed cost and total variable costs.

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