2.4 MA ABMY3

Variable costs are constant if expressed on a per unit basis.

• True

• False

Total variable costs increase as the level of activity increases.

• True

• False

The average fixed cost per unit increases as the level of activity increases.

• True

• False

Total fixed costs decrease as the level of activity decreases.

• True

• False

3 people go to a restaurant, each person orders a soda for $2
Total variable cost is $6

• True

• False

3 people go to a restaurant, each person orders a soda for $2
Variable cost per unit is $6

• True

• False

3 people go to a restaurant, each person orders a soda for $2

4th person came and order a soda so total variable cost decrease to $4

• True

• False

the group of 3 people orders a large pizza to share for a price of $12
so pay $4 per person

• True

• False

the group of three orders a large pizza to share for a price of $12

cost of pizza is fixed cost

• True

• False

the group of three orders a large pizza to share for a price of $12

4th person joined too so cost per person is

• $4

• $3

• $2

• $12