As sales increase, total variable costs increase, but variable costs per unit
A) Increase
B) Decrease
C) Decrease up to a point and then increase
D) Remain constant

Question

Quizplus · Accepted Answer

Variable costs per unit remain constant regardless of the level of sales or production volume. This is because variable costs change in total in direct proportion to changes in activity level, but on a per-unit basis, they stay the same.

As Sales Increase, Total Variable Costs Increase, but Variable Costs