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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Describe how total fixed costs and unit fixed costs behave with changes in the level of activity.

To determine

Cost Behavior: It refers to the method in which a cost changes with respect to the changes in its related activities. This method helps the management in estimating costs for decision making and predict future profits.

To describe: the behavior of the total fixed costs and unit fixed costs with changes in the level of activity.

Explanation

The total fixed costs remain constant irrespective to the changes in the level of activity. However, the unit fixed cost is inversely proportional to the changes in the level of activity...

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