An increase in the activity level within the relevant range results in:
A) an increase in fixed cost per unit.
B) a proportionate increase in total fixed costs.
C) an unchanged fixed cost per unit.
D) a decrease in fixed cost per unit.

Question

Quizplus · Accepted Answer

As the activity level increases, the total fixed costs remain constant, but the fixed cost per unit decreases because the same total fixed costs are spread over a larger number of units.

An Increase in the Activity Level Within the Relevant Range