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1 - 4 . Distinguish between ( a ) a variable cost, ( b ) a fixed cost, and ( c ) a mixed cost.
Distinguish between a a variable cost, b a fixed cost, and c a mixed cost.
What effect does an increase in the activity level have on
a Average fixed costs per unit?
b Variable costs per unit?
c Total fixed costs?
d Total variable costs?
Managers often assume a strictly linear relationship between cost and the level of activity. Under what conditions would this be a valid or invalid assumption?
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