1. As production volume increases, describe how variable costs "behave: (a) on a total basis and (b) on a per unit basis. Explain. (2pts each)
2. As production volume increases, describe how fixed costs "behave": (a) on a total basis and (b) on a per unit basis. Explain. (2pts each)
3. Lickety-Split makes pints of ice cream sold by major retailers. Identify each of the following costs as variable (V) or fixed (F), relative to the number of pints of ice cream produced. (1pt each)

a. Rent on the manufacturing facility

b. Ingredients in the ice cream

c. Depreciation on the factory equipment (using straight-line method)

d. Screws and other supplies used to maintain the factory equipment

e. Total wages paid to the manufacturing workers (not the rate per hour)

f. Annual business license to operate the company

g. Production managers annual salary