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Activuty levels

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Activuty levels

  • This topic has 1 reply, 2 voices, and was last updated 9 months ago by John Moffat.
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  • April 20, 2022 at 10:43 am #654039
    zaramujeeb
    Member
    • Topics: 15
    • Replies: 2
    • ☆

    A company has a production cost which has both fixed and variable elements.

    The following statements refer to the behaviour of the coat when activity levels change. Are the statements true or false?

    1. When activity levels change, total variable costs remain constant

    2. When activity levels fall, total cost per unit increases

    Total variable costs change as activity levels change & when activity levels fall total cost per unit increases. So only statement 2 is correct?

    April 20, 2022 at 2:47 pm #654095
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    Yes – only statement 2 is correct (as is explained in my free lectures).

    But again, why are you attempting a question for which you do not have an answer? 🙂

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