Question

Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As its cost driver activity changes within the relevant range, which of the following statements is/are correct? I. As the cost driver level increases, total fixed cost remains unchanged. II. As the cost driver level increases, unit fixed cost increases III. As the cost driver level decreases, unit variable cost decreases. 1. I only is correct. 2. I, II, and III are correct. 3. II and III only are correct 4. I and II only are correct. O

Answer 1

Right alternative is 1.

Unit variable cost will stay unaltered paying little mind to what befalls the cost driver.

All out fixed cost will stay unaltered paying little heed to changes in the cost driver since all out fixed expense is unaffected by changes in the cost driver.

While complete fixed cost will stay unaltered paying little heed to changes in the cost driver, unit fixed cost won't. On the off chance that the cost driver level expands, all out fixed cost will continue as before, however the complete number of units will increment, and unit fixed cost will diminish

Thusly, Only Statement 1 is right.