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Which of the following describes the behavior of a variable cost per unit?

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

  • increase
  • stay the same
  • decrease
  • either increase or decrease, depending on the fixed costs

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