If the activity level increases, what happens to the total variable cost?
A)It remains the same.
B)It decreases.
C)It increases.
D)It depends on how much the activity level increases.

Question

Quizplus · Accepted Answer

When the activity level increases, the total variable cost also increases. This is because as the level of activity increases, there is a corresponding increase in the amount of resources, such as labor and materials, needed to produce the goods or services. Therefore, the variable cost, which is directly proportional to the level of activity, also increases.

If the Activity Level Increases, What Happens to the Total