As the Cost-Driver Level Increases in the Relevant Range,variable Costs

question 88

Multiple Choice

As the cost-driver level increases in the relevant range,variable costs per unit of cost driver ________ but total variable costs ________.

• A) do not change; increase in direct proportion to the cost-driver activity level
• B) do not change; decrease in direct proportion to the cost-driver activity level
• C) increase; do not change
• D) decrease; do not change

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Definitions:

Efficiency Rate

The ratio of the actual output produced to the expected standard output, utilized in assessing operational efficiency.

Manufacturing Capacity

The maximum amount of products a facility can produce over a given period under normal working conditions.

Quality Cost Report

A document outlining the expenses related to maintaining product quality, which encompasses prevention, appraisal, and failure costs.

Prevention Costs

Money spent on measures aimed at preventing defects in products or services prior to their occurrence.