Within the Relevant Range, If There Is a Change in the Level

question 130

Multiple Choice

Within the relevant range, if there is a change in the level of the cost driver, then:

• A)fixed and variable costs per unit will change
• B)fixed and variable costs per unit will remain the same
• C)fixed costs per unit will remain the same and variable costs per unit will change
• D)fixed costs per unit will change and variable costs per unit will remain the same

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Definitions:

Inspection Costs

Expenses incurred to ensure that products or services meet specified quality and safety standards before being sold or delivered.

Least-Squares Regression

A statistical method used to determine the line of best fit by minimizing the sum of the squares of the differences between the observed and predicted values.

Fixed Component

A cost that does not change with the level of goods or services produced by the business, such as rent or salaries.

Variable Cost

Variable costs are expenses that vary directly with the level of production or sales volume.