1. Classify each of the following costs as a variable or fixed cost ifunits produced is the activity base?
2. Direct material costs
3. Direct labor costs
4. Electricity costs of $0.35 per kilowatt
5. When output volume increases, do fixed costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.
6. What effect will an increase in unit variable cost or total fixed costs have on the break-even point? What effect will an increase in the unit sales price have on the break-even point? Please explain.