For any volume of activity, total costs are:
A)Fixed costs + (Unit variable costs x Volume of activity).
B)Fixed costs + (Total variable costs/volume of activity).
C)Variable costs + (Unit fixed costs x Volume of activity).
D)Variable cost + (Total fixed costs/volume of activity).
E)None of the above.

Question

Quizplus · Accepted Answer

Total costs consist of fixed costs that do not change with volume and variable costs that increase as volume increases. Therefore, the formula that combines fixed costs and unit variable costs with volume of activity represents the best choice.

For Any Volume of Activity, Total Costs Are