Question

Variable expenses increases with the increase in the level of activity,

a. In the same proportion as the activity increases

b. Not in the same proportion as the activity increases

c. In inverse proportion of activity increase

d. None of the above​

Answer 1

Answer:

in the same proportion as the activity increases

Answer 2

a. It Increases in the same proportion as the activity increases

• The variable and semi-variable expenses increase with the increase in energy level in the same proportion.
• Variable expenses and energy levels have proportionate direct relation.
• Variable expenses are costs of such products or services that subsequently change over time, such as the price of chips or movie ticket prices.
• All such costs tend to fluctuate over a week, month, or year, it can be challenging to decide what you'll spend at a particular point in time.
• The activity level is the amount paid for an activity used by a cost object. If the activity level reduces, then activity costs may also decline.

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