As the cost-driver activity level increases within the relevant range _____.
A)total fixed costs increase
B)fixed costs per unit decrease
C)total variable costs decrease
D)variable costs per unit decrease

Question

Quizplus · Accepted Answer

As the cost-driver activity level increases within the relevant range, fixed costs remain constant but are spread over a larger number of units, resulting in a decrease in fixed costs per unit. Total variable costs and variable costs per unit typically increase with the increase in activity level. Therefore, choice B is the correct answer.

As the Cost-Driver Activity Level Increases Within the Relevant Range