1.Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs were 50% of total unit costs. If 9,500 units are manufactured next month and cost behavior patterns remain unchanged, how will costs be affected?

a.Total costs per unit will increase.

b.Variable cost per unit will increase.

c.Total cost per unit will decrease.

d.Total variable costs will remain unchanged.

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2.Within the relevant range, what is the difference between variable costs and fixed costs?

a.Total variable costs and total fixed costs fluctuate.

b.Variable costs per unit fluctuate and fixed costs per unit remain constant.

c.Total variable costs and total fixed costs are constant.

d.Variable costs per unit are constant and fixed costs per unit fluctuate.

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3.What will result from an decrease in the activity level within the relevant range?

a.An increase in fixed cost per unit.

b.A decrease in fixed cost per unit.

c.A proportionate increase in total fixed costs.

d.An unchanged fixed cost per unit.

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4.The linear equation Y = a + bX is often used to express cost formulas. Which of the following representations in this equation is correct?

a.The term represents the variable cost in total.

b.The X term represents total costs.

c.The b term represents the variable cost per unit of activity.

d.The Y term represents total fixed costs.