Variable costs as activity increases will A will stay the sa

Variable costs, as activity increases, will

A) will stay the same in total. B) increase per unit. C) remain constant per unit. D) decrease in total.

Solution

Answer is option C) remain constant per unit.

A variable cost remains constant on a per unit basis, but changes in total in direct relation to changes in volume.

total variable costs do change. It increases with activity increases and decreases with activity decreases. However, variable cost per unit does not change and remains constant irrespective of activity level.