Asked by Tanya Woods on May 10, 2024
Verified
Total variable costs change in proportion to changes in volume of activity.
Total Variable Costs
The sum of all costs that vary with the level of production or sales, such as materials and labor.
Volume Of Activity
A term related to the level of business operations or transactions undertaken by a company within a specific period.
- Discern between fixed, variable, and mixed expenditures concerning their connection with the amount of production.
Verified Answer
MG
Moura GhaziriMay 13, 2024
Final Answer :
True
Explanation :
Total variable costs are those costs that vary with the level of activity, such as direct materials or hourly wages. Therefore, as the volume of activity increases, the total variable costs will also increase proportionally.
Learning Objectives
- Discern between fixed, variable, and mixed expenditures concerning their connection with the amount of production.
Related questions
Curvilinear Costs Increase as Volume of Activity Increases,but at a ...
Total Fixed Costs Change in Proportion to Changes in Volume ...
Variable Costs Per Unit Increase Proportionately with Increases in Volume ...
A Step-Wise Variable Cost Can Be Separated into a Fixed ...
Within the Relevant Range, a Difference Between Variable Costs and ...