Question: What type of cost remains the same per unit at every level of activity?

Answer: variable costs

Question: Which statement describes a fixed cost?

Answer: When activity declines, its cost per unit increases.

Question: Variable costs are costs that

Answer: Vary in total directly and proportionately with changes in the activity level.

Remain the same per unit at every activity level.

Question: Why is determination of a relevant range important?

Answer: Cost behavior outside the relevant range may be distorted

Question: Which of the following is likely to contain a linear relationship between costs and activities?

Answer: relevant range