Which costs will change with a decrease in activity within the relevant range
A)Unit fixed costs and total variable cost.
B)Unit variable cost and unit fixed cost.
C)Unit fixed cost and total fixed cost.
D)Total fixed costs and total variable cost.

Question

Quizplus · Accepted Answer

Unit fixed costs appear to decrease as activity decreases because the fixed cost is spread over more units, making the cost per unit seem lower. Total variable cost will also change with a decrease in activity, as it directly varies with the level of output or activity.

Which Costs Will Change with a Decrease in Activity Within