As Activity Level Decreases, Unit Variable Cost

question 13

Multiple Choice

As activity level decreases, unit variable cost:

• A) increases proportionately with activity.
• B) decreases proportionately with activity.
• C) remains constant.
• D) decreases by a fixed amount.

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Definitions:

Contractual Duty

A legal obligation in a contract requiring a party to act or not act in a certain way.

Statute of Limitations

A statute that establishes the deadline by which legal cases must be filed after an incident occurs.

Discharge

The release or elimination of an obligation, such as a debt, under the law.

Contract

A legally binding agreement between two or more parties, typically involving the exchange of goods, services, money, or promises.