If the level of activity increases,
A)variable cost per unit and total fixed costs increase.
B)fixed cost per unit and total variable cost increase.
C)total cost will increase and fixed cost per unit will decrease.
D)variable cost per unit and total cost increase.

Question

Quizplus · Accepted Answer

As the level of activity increases, total costs increase due to higher total variable costs, while fixed cost per unit decreases because the fixed costs are spread over more units.

If the Level of Activity Increases