As the level of activity increases, the total variable cost
A)increases proportionally.
B)changes inversely.
C)changes conversely.
D)remains the same.

Question

Quizplus · Accepted Answer

Total variable cost is directly proportional to the level of activity. This means that as the level of activity increases, the total variable cost also increases proportionally. This is because variable costs occur when there is a change in the level of output or production. Hence, the cost will increase as more resources are utilized to produce more output.

As the Level of Activity Increases, the Total Variable Cost