Which of the following statements is true concerning total variable costs?
A)Total variable costs do not vary in total within the relevant range.
B)Total variable costs vary in total in proportion to the activity level.
C)Total variable costs vary in total in an inverse relationship with production.
D)Total variable costs vary in total,but not in proportion to changes in the activity level.

Question

Quizplus · Accepted Answer

Total variable costs vary in total in proportion to the activity level, meaning that as the level of activity increases or decreases, the total variable costs will also increase or decrease in proportion. This is due to the fact that variable costs are dependent on the level of production or activity in the short run.

Which of the Following Statements Is True Concerning Total Variable