When production levels are expected to increase within a relevant range, and a flexible budget is used, what effect would be anticipated with respect to each of the following costs?
Choice "C" is correct. Within a relevant range, total fixed costs remain constant. Fixed costs per unit therefore decrease as production levels (i.e., the number of units) increase. On the other hand, variable costs per unit remain constant, so total variable costs increase as production levels increase.Choices "d", "b", and "a" are incorrect, based on the above explanation.
