ECONOMICS

Detailed explanation-1: -Explanation: As the level of volume of activity increases, the variable cost per unit remains constant while the total variable cost increases.

Detailed explanation-2: -A variable cost increases as the level of activity increases; for example, the total cost of direct materials goes up in conjunction with increases in production volume. The variable cost concept can be used to model the future financial performance of a business, as well as to set minimum price points.

Detailed explanation-3: -The variable cost of production is a constant amount per unit produced. As the volume of production and output increases, variable costs will also increase. Conversely, when fewer products are produced, the variable costs associated with production will consequently decrease.

Detailed explanation-4: -Variable cost – A cost that in total increases when the firm increases its output and decreases when the firm reduces its output.

Detailed explanation-5: -Answer and Explanation: Variable costs will be increasing in total and remain constant per unit as the activity increases.