When a flexible budget is used, a decrease in the actual production level within a range of activity would
A) decrease variable cost per unit.
B) decrease total variable costs.
C) increase variable cost per unit.
D) decrease fixed cost per unit.

Question

Quizplus · Accepted Answer

With a flexible budget, variable costs should adjust proportionately with the decrease in production level. Therefore, total variable costs should decrease as production level decreases within the relevant range of activity.

When a Flexible Budget Is Used, a Decrease in the Actual