Assuming that all activity is within the relevant range,a decrease in the activity level in a flexible budget will:

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A flexible budget adjusts costs based on changes in activity levels, so a decrease in activity level will result in a decrease in total costs. Fixed costs will remain the same, and variable costs are likely to increase on a per-unit basis as the decrease in activity level means less output to spread those costs across. However, this increase in variable cost per unit is offset by the decrease in activity level, resulting in an overall decrease in total costs.

Assuming That All Activity Is Within the Relevant Range,a Decrease