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. Identify some factors that might cause variable costs per unit to change if the actual level of activity in a given month falls above
. | Identify some factors that might cause variable costs per unit to change if the actual level of activity in a given month falls above or below the relevant range. (You may select more than one answer) |
a. | Direct material costs per unit could decrease if quantity discounts are received from the manufacturer for larger order quantities. |
b. | Direct material costs could increase if quantity discounts currently being received are lost if order quantities decrease significantly. |
c. | Direct labour costs per unit could increase if activity levels increase and installations have to be completed using more expensive overtime hours. |
d. | Direct labour costs per unit could increase if activity levels decrease and less experienced, and lower paid, installers are laid off. |
e. | Direct labour costs per unit could decrease as the number of installations increases due to the effects of learning (i.e., the time required for each installation may decrease with experience). |
f. | Direct material costs per unit could increase if quantity discounts are received from the manufacturer for larger order quantities. |
Direct material costs could decrease if quantity discounts currently being received are lost if order quantities decrease significantly. |
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