Patel Company incurs both fixed and variable production costs.Assuming the production is within the relevant range,if volume goes up by 15%,then the total variable costs would ________.
A) increase by 15%
B) remain the same
C) increase by an amount less than 15%
D) decrease by 15%

Question

Quizplus · Accepted Answer

Variable costs change in direct proportion to changes in volume. Therefore, if volume increases by 15%, total variable costs would also increase by 15%. Fixed costs, on the other hand, would remain unchanged within the relevant range.

Patel Company Incurs Both Fixed and Variable Production Costs