Which of the following describes the behavior of a variable cost per unit?

A) It varies in increasing proportion with changes in the activity level.
B) It varies in decreasing proportion with changes in the activity level.
C) It remains constant with changes in the activity level.
D) It varies in direct proportion with the activity level.

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Maddy Liddle · Accepted Answer

Final Answer : C, Explanation :  DVariable costs per unit remain constant with changes in the activity level, which means they do not change per unit as the level of activity changes. Additionally, variable costs vary in direct proportion with the activity level overall, meaning the total variable costs will increase as the activity level increases and decrease as the activity level decreases, but on a per-unit basis, they remain constant.

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