Last month, the Alexia Company experienced a sharp increase in its activity level; however, the company's total fixed cost did not change. You have been asked to determine what cost changes the company can expect as a result of the change in activity level. What will you report?

Question

Social Studies

Dempsey

7 May, 05:12

Last month, the Alexia Company experienced a sharp increase in its activity level; however, the company's total fixed cost did not change. You have been asked to determine what cost changes the company can expect as a result of the change in activity level. What will you report?

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Answers (1)

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Jadon Clark · Answer 1

If Alexia Company increases its activity this will result in a Variable Cost increases and Variable Overhead increase.

Explanation:

If we own a company, and that company expend an amount of certain resources or money in a certain operation. This will cost a defined amount of hours, money to operate and get results. If we increase our activity level or production this action will increase the variable costs involved.