ACCT 2209 Lecture Notes - Lecture 2: Fixed Cost, Variable Cost, Indirect Costs
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How a cost will react to changes in the level of business activity: total variable costs change when activity changes, total fixed costs remain unchanged when activity change. Your total long-distance telephone bill is based on how many minute you talk total long-distance telephone bill. The cost per long distance minutes talked is constant. Your monthly basic telephone bill probably does not change when you make more local calls. The average cost per local call decreases as more local calls are made. Total variable cost changes as activity level changes. Total fixed cost remains the same even when the activity level changes. Variable cost per unit remains the same over wide ranges of activity. Fixed cost per unit goes down as activity level goes up. Which of the following costs would be variable with respect to the number of cones sold at a baskin &
