1. Which of the following describes the behavior of a variable cost per unit?
- varies in decreasing proportion with changes in the activity level
- varies in direct proportion with the activity level
- remains constant with changes in the activity level
- varies in increasing proportion with changes in the activity level
2. Which of the following is not an example of a cost that varies in total as the number of units produced changes?
- electricity per KWH to operate factory equipment
- straight-line depreciation on factory equipment
- wages of assembly worker
- direct materials cos
3. As production increases, variable costs per unit
- stay the same
- either increase or decrease, depending on the fixed costs
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