When Using a Flexible Budget, What Will Happen to Variable

question 129

Multiple Choice

When using a flexible budget, what will happen to variable costs on a per-unit basis as production increases within the relevant range?

• A) Decrease
• B) Increase
• C) Remain unchanged
• D) Fixed costs are not considered in flexible budgeting

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Definitions:

FUTA Tax

A federal tax in the United States paid by employers to fund unemployment benefits.

Employer's Payroll Taxes

Taxes that employers are required to pay on behalf of their employees, including Social Security, Medicare, and unemployment taxes.

Accrued Vacation Privileges

Employee benefits that accumulate over time, referring to the right to take paid time off that's been earned but not yet used.

Vacation Pay Payable

Liabilities owed to employees for earned but unused vacation time, which a company must pay out in the future.