Question

If the level of activity increases within the relevant range: O variable cost per unit and total cost also increase. O variab
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Answer #1

Answer is Total Cost will increase and fixed cost per unit will decrease.

Other Solutions -

Option 1. Wrong because as the level of activity increase the variable cost per unit will remain same and total cost will increase.

Option 2. Wrong because as the level of activity increase the variable cost per unit will remain same and fixed cost will decrease.

Option 3. Wrong because as the level of activity increase fixed cost per unit will decrease and variable cost will increase.

Option 4. Right because as the level of activity increase sales will increases fixed cost per unit will decrease because volume will increase but total fixed cost will remain same and totalcost will remain increases due to increase in volume of sales

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