question archive 1) Variable costs are costs that vary in total in direct proportion to changes in the activity level
1) Variable costs are costs that vary in total in direct proportion to changes in the activity level
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1) Variable costs are costs that vary in total in direct proportion to changes in the activity level.
True
False
2. Variable costs are costs that vary on a per-unit basis with changes in the activity level.
True
False
3. Direct materials and direct labor costs are examples of variable costs of production.
True
False
4. Total variable costs change as the level of activity changes.
True
False
5. Unit variable cost does not change as the number of units of activity changes.
True
False
6. A mixed cost has characteristics of both variable and fixed costs.
True
False
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Answer:
1). True
2). False
3). True
4). True
5). True
6). True
The variable costs are costs that change with the change in the level of activity that is, they vary in total in direct proportion to changes in the activity level. Examples of variable costs are Direct materials, direct labor costs and variable manufacturing overhead costs
However, the per-unit basis of variable costs does not change with changes in the activity level.
The fixed costs are costs that do not change irrespective of changes in activity level within the relevant range while the mixed costs are costs that have both a fixed and variable element in them
