Which one of the following statements is correct? O a. Avariable cost is a cost whose cost per unit varies as the activity level rises and falls. O b. None of the given answers is correct O c. The total fixed cost depends on how many units are produced. O d. Adecrease in production will ordinarily result in a decrease in total variable costs. O e. As activity decreases within the relevant range, fixed costs remain constant on a per unit basis. е.

Which one of the following statements is correct? O a. Avariable cost is a cost whose cost per unit varies as the activity level rises and falls. O b. None of the given answers is correct O c. The total fixed cost depends on how many units are produced. O d. Adecrease in production will ordinarily result in a decrease in total variable costs. O e. As activity decreases within the relevant range, fixed costs remain constant on a per unit basis. е.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 14MC: Which of the following statements is true regarding average fixed costs? A. Average fixed costs per...

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When should a segment be dropped? A. only when the decrease in total contribution margin is less than the decrease in fixed cost B. only when the decrease in total contribution margin is equal to fixed cost C. only when the increase in total contribution margin is more than the decrease in fixed cost D. only when the decrease in total contribution margin is less than the decrease in variable cost
When fixed costs increase and all other variables remain unchanged, the contribution margin will A. remain unchanged _____________________. B. increase C. decrease D. increase variable costs per unit
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Which of the following statements is true regarding average fixed costs? Select one: a. Average fixed costs per unit fall as the level of activity rises. b. Average fixed costs per unit cannot be determined. c. Average fixed costs per unit remain fixed regardless of level of activity. d. Average fixed costs per unit rise as the level of activity rises.
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Which of the following statements is correct: A. total fixed cost remain constant while variable cost as total increases as level of activities decreases. B. fixed cost per unit and total variable costs increases as level of activities increases. C. variable cost per unit and total fixed cost remain constant as level of activities increases. D. fixed cost per unit remain constant and variable cost per unit decreases as level of activities decreases.
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