Question: 1. Analyze what effect an increase in production volume has on per unit fixed costs, per unit variable costs, total fixed costs, and total variable

1. Analyze what effect an increase in production volume has on per unit fixed costs, per unit variable costs, total fixed costs, and total variable costs.

2. What is meant by an activity base when dealing with variable costs? Give several examples of activity bases.

3. Managers often assume a strictly linear relationship between cost and volume. How can this practice be defined in light of the fact that many costs are curvilinear?

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