Total variable cost will increase and decrease in direct proportion to the increase and decrease in activity levels.

Name: Total variable cost will increase and decrease in direct proportion to the increase and decrease in activity levels.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is a key characteristic of variable costs, as they are directly related to activity levels. As the level of activity increases, variable costs increase, and as the level of activity decreases, variable costs decrease.

Total Variable Cost Will Increase and Decrease in Direct Proportion