When the Level of Activity Increases Within the Relevant Range

question 161

Multiple Choice

When the level of activity increases within the relevant range, what is the effect on the fixed cost per unit?

• A) It increases.
• B) It decreases.
• C) It remains the same.
• D) It increases at first then decreases.

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Definitions:

Corporate Charters

A legal document issued by a governmental authority that establishes a corporation as a legal entity and outlines its structure and purpose.

Private Corporation

A corporation owned by just one or a few people who are closely involved in managing the business.