Within the relevant range,what is the difference between variable costs and fixed costs?
A) Variable costs per unit fluctuate and fixed costs per unit remain constant.
B) Variable costs per unit are constant and fixed costs per unit fluctuate.
C) Total variable costs and total fixed costs are constant.
D) Total variable costs and total fixed costs fluctuate.

Question

Quizplus · Accepted Answer

Variable costs per unit remain constant regardless of the level of production or service activity, while fixed costs per unit fluctuate as the level of activity changes. This is because the total amount of fixed costs stays the same, so when you divide by a higher level of activity, the cost per unit decreases, and vice versa.

Within the Relevant Range,what Is the Difference Between Variable Costs