Conceptual Questions: 1. Expense A is a fixed cost; Expense B is a variable cost. During the current year the production activity level has increased but is still within the relevant range. In terms of cost per unit, what can we expect to occur? 2. Which of the following is an example of an activity base? 3. Which of the following statements best describes the difference between a variable cost and a step-variable cost? 4. Which of the following fixed costs would not be considered a discretionary cost, as opposed to a committed fixed cost? 5. Which of the following statements best describes the concept of relevant range? 6. How would you distinguish the variable cost element if you are shown a graph of a regression line? 7. The linear equation Y = a + bx is often used to express cost formulas. In relation to this equation, what does each of the letters represent? 8. Which of the following statements best describes the difference between a contribution margin income statement and a traditional income statement?