ECONOMICS

Detailed explanation-1: -A variable cost is a cost like direct materials that remain the same per unit regardless of how many units are manufactured. This means that the total cost increases as the number of units produced increase and decrease as the number of units decreases.

Detailed explanation-2: -On a per unit basis, a variable cost per unit remains constant but the total amount of variable cost changes with the level of production. When production volume and variable costs are graphed, a. Variable cost is represented by a straight line starting at the zero cost level.

Detailed explanation-3: -Answer and Explanation: A cost that remains constant per unit at various levels of activity is a c) variable cost. The cost of material, for example, remains the same per unit produced and is incurred only if production occurs. These costs are variable because they rise and fall with volume whereas fixed costs do not.

Detailed explanation-4: -Variable costs vary in a linear fashion with the production level. However, when stated on a per unit basis, variable costs remain constant across all production levels within the relevant range. The following two charts depict this relationship between variable costs and output volume.

Detailed explanation-5: -Answer and Explanation: b. Variable cost remains constant on a per-unit basis as the number of units produced increases.