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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