If Activity Level Increases,what Happens to the Total Variable Cost

question 22

Multiple Choice

If activity level increases,what happens to the total variable cost?

• A)It remains the same.
• B)It decreases.
• C)It increases.
• D)It depends on how much the activity level increases.

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Definitions:

Distorted Product Cost

Occurs when the assigned costs of a product do not accurately reflect the actual resources consumed by the product.

Poor Decisions

Choices made with lack of judgment or information that result in unfavorable outcomes.

Volume-related Measures

Metrics that evaluate performance, capacity, or financial results based on the volume of activities, production, or transactions.

Manufacturing Settings

The environment or scenario where manufacturing processes take place, including all operational aspects like the production line, workers, and machinery.