A primary difference between variable costs and fixed costs is: A)Variable costs

Question

A primary difference between variable costs and fixed costs is:

A)Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity.

B)Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity.

C)Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity.

D)Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range.

E)Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.

Explanation / Answer

C)Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity.

since variable costs change with the level of activity and fixed costs do not change with change in activity. Thus Fixed Cost per unit are variable and variable cost per unit are fixed

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