An increase in the activity level within the relevant range results in:
A)a proportionate increase in total fixed costs.
B)an increase in fixed cost per unit.
C)an unchanged fixed cost per unit.
D)a decrease in fixed cost per unit.

Question

Quizplus · Accepted Answer

Fixed costs remain constant in total amount as activity levels change within the relevant range, which means that on a per-unit basis, fixed costs decrease as the activity level (or volume of units produced) increases.

An Increase in the Activity Level Within the Relevant Range