When the Activity Level Is Expected to Decline Within the Relevant

question 22

Multiple Choice

When the activity level is expected to decline within the relevant range, what effects would be anticipated with respect to each of the following?

• A)Fixed cost per unit - INCREASE; Variable cost per unit - NO CHANGE
• B)Fixed cost per unit - INCREASE; Variable cost per unit - INCREASE
• C)Fixed cost per unit - NO CHANGE; Variable cost per unit - NO CHANGE
• D)Fixed cost per unit - NO CHANGE; Variable cost per unit - INCREASE

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Definitions:

Package Carrier

A company or service that specializes in the transportation and delivery of parcels and packages, operating within postal, commercial, or freight contexts.

Private Fleet

A company-owned or leased set of transport vehicles dedicated to moving the company’s goods, providing control over logistics operations.

Lead Time Demand

The total demand for a product or service during its lead time, which is the time between order placement and delivery.

Safety Inventory

Additional stock kept on hand to protect against variability in demand or supply, ensuring that demand can be met without stockouts.