When the Level of Activity Increases Within the Relevant Range

question 26

Multiple Choice

When the level of activity increases within the relevant range, how does each of the following change

• A)Average cost per unit INCREASES; Total variable cost INCREASES; Fixed cost per unit INCREASES
• B)Average cost per unit INCREASES; Total variable cost - NO CHANGE; Fixed cost per unit INCREASES
• C)Average cost per unit DECREASES; Total variable cost - NO CHANGE; Fixed cost per unit DECREASES
• D)Average cost per unit DECREASES; Total variable cost INCREASES; Fixed cost per unit DECREASES

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Definitions:

Dividend Yield

A financial metric that measures the annual dividends issued by a company compared to the price of its shares.

Total Asset Turnover

A financial ratio that measures how efficiently a company uses its assets to generate sales revenue.

Inventory Turnover

A figure representing the number of times a business's stock is sold and restocked during a certain period.

Debt Ratio

A financial ratio that measures the proportion of a company’s total debt to its total assets, indicating the degree of leverage and financial risk.