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14 April, 10:29

what effect does an increase in the activity level have on-- - a. Unit fixed cost? b. Unit variable cost? c. Total fixed cost? d. Total Variable cost?

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  1. 14 April, 14:06
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    a. Unit fixed cost = Decreases

    b. Unit variable cost = Increases

    c. Total fixed cost = Unchanged

    d. Total Variable cost = Increases

    Explanation:

    The unit fixed cost is decreasing as there is an increase in the activity level but the total fixed cost would remain constant

    The unit variable cost increases if there is an increase in the activity level as it shows a direct relationship between the activity level and unit variable cost

    The total fixed cost would remain the same whether the activity level changes or not. It always remains constant

    Together with the unit variable cost, the total variable cost is also increased if the activity level increases
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