6. Variable costs are costs that..

Vary inversely with changes in activity.

Increase on per unit basis as activity increases.

Decrease on per unit basis as activity increases.

Remains constant as activity changes.

Vary directly with changes in activity.

7. What is the primary trade-off that an accountant must consider when deciding whether to identify cost drivers?

Is the cost/benefit of the process reasonable for more accurate cost behavior obtained.

Will the cost driver identification provide different costs for different purposes.

Will material related drivers be more accurate than labor-related drivers.

Will the cost relationship be to complex to understand.

There is no trade-off to consider using cost drivers.