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

varies in decreasing proportion with changes in the activity level

varies in direct proportion with the activity level

remains constant with changes in the activity level

varies in increasing proportion with changes in the activity level

2. Which of the following is not an example of a cost that varies in total as the number of units produced changes?

electricity per KWH to operate factory equipment

straight-line depreciation on factory equipment

wages of assembly worker

direct materials cos

3. As production increases, variable costs per unit

increase

stay the same

decrease

either increase or decrease, depending on the fixed costs