If activity is higher than expected,total variable costs should be higher than expected.If activity is lower than expected,total variable costs should be lower than expected.

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Quizplus · Accepted Answer

This statement is true according to the concept of variable costs being directly proportional to the level of activity. If activity increases, variable costs will also increase, and if activity decreases, variable costs will also decrease.

If Activity Is Higher Than Expected,total Variable Costs Should Be