An increase in total variable costs usually indicates ________.
A)the cost-driver activity level is decreasing
B)the cost-driver activity level is increasing
C)variable costs per unit is decreasing
D)fixed costs per unit is increasing

Question

Quizplus · Accepted Answer

Total variable costs increase when the cost-driver activity level increases. This is because variable costs are those costs that vary with changes in the level of activity or production. As the level of activity increases, more resources are required, leading to an increase in variable costs. Therefore, an increase in total variable costs usually indicates that the cost-driver activity level is increasing.

An Increase in Total Variable Costs Usually Indicates ________