Asked by Caitlin Minton on May 25, 2024
Verified
Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.
Variable Costs
Expenses that fluctuate in proportion to activity levels within a business.
Per-unit Basis
A calculation or measurement that is made for each individual unit.
Level of Activity
Level of activity refers to the volume of production or the rate at which a company operates, often influencing costs and operational strategy.
- Identify the differences between per-unit changing costs and total activity level-dependent costs.
Verified Answer
KL
Kylie LoegeringMay 31, 2024
Final Answer :
True
Explanation :
Variable costs per unit remain constant even as the level of production or activity changes, meaning the total variable costs change in direct proportion to the level of activity.
Learning Objectives
- Identify the differences between per-unit changing costs and total activity level-dependent costs.
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