An increase in total variable costs usually indicates that ________.
A) the cost-driver activity level is decreasing
B) the cost-driver activity level is increasing
C) variable costs per unit is decreasing
D) fixed costs per unit is increasing

Question

Quizplus · Accepted Answer

Total variable costs are directly related to the cost-driver activity level. As the activity level increases, there is usually a corresponding increase in total variable costs. Therefore, an increase in total variable costs usually indicates that the cost-driver activity level is increasing.

An Increase in Total Variable Costs Usually Indicates That ________