Reference no: EM132824162

Problem 1: Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs were 50% of total unit costs. If 9,500 units are manufactured next month and cost behavior patterns remain unchanged, how will costs be affected?

a. Total costs per unit will increase.
b. Variable cost per unit will increase.
c. Total cost per unit will decrease.
d. Total variable costs will remain unchanged.
 
Problem 2: Within the relevant range, what is the difference between variable costs and fixed costs?

a. Total variable costs and total fixed costs fluctuate.
b. Variable costs per unit fluctuate and fixed costs per unit remain constant.
c. Total variable costs and total fixed costs are constant.
d. Variable costs per unit are constant and fixed costs per unit fluctuate.