Question

Within the relevant range of activity ______. variable costs do not change in total, only per unit fixed costs remain constant in total costs and activity can be approximated by a straight line

Answer 1

Answer:

False

Explanation:

Within the relevant range of activities, total fixed costs remain constant and fixed costs per unit decrease as total output increases. Total variable costs vary depending on total output, but variable costs per unit should remain constant.

On a long term basis, all costs are variable, that is why it is important to consider the range of activities, i.e. output levels.