A characteristic of a variable cost is
A) The total cost varies in proportion to changes in the level of activity.
B) The cost per unit remains constant, regardless of the level of activity.
C) Both that the total cost varies in proportion to changes in the level of activity and that the cost per unit remains constant, regardless of the level of activity.
D) Neither that the total cost varies in proportion to changes in the level of activity nor that the cost per unit remains constant, regardless of the level of activity.

Question

Quizplus · Accepted Answer

A characteristic of a variable cost is that the total cost varies in proportion to changes in the level of activity. In addition, the cost per unit remains constant or decreases as the level of activity increases, which is also known as the cost per unit behavior. Therefore, both options A and B are correct.

A Characteristic of a Variable Cost Is