As activity level decreases, unit variable cost: Select one: a

Management Sep 05, 2020

As activity level decreases, unit variable cost:

Select one:

a. increases proportionately with activity.

b. decreases by a fixed amount.

c. decreases proportionately with activity.

d. remains constant.

Expert Solution

As activity level decreases, unit variable cost remains constant. Variable cost per unit remains constant irrespective of the increase in activity. But total variable cost increases proportionately.

So, the correct option is D "remains constant".

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