Which of the following describes the behavior of a variable cost per unit?

Question

BlackTom AI · Accepted Answer

Variable cost per unit is constant (within the relevant range) even though total variable cost changes with activity. Relevant concepts: a variable cost changes in total as activity (units produced or sold) changes; however, the cost assigned to each individual unit (variable cost per unit) does not change under the usual cost-behavior assumption. By contrast, fixed costs stay the same in total and therefore decline on a per-unit basis as activity rises.

Step-by-step reasoning and numeric example:
1. Define: Let v be the variable cost per unit and Q be quantity produced. Total variable cost (TVC) = v × Q.
2. Pick a number: suppose v = $5 per unit.
3. Compute for Q = 100 units: TVC = $5 × 100 = $500; cost per unit = $5.
4. Compute for Q = 200 units: TVC = $5 × 200 = $1,000; cost per unit = $5.
Intermediate arithmetic shown: 5×100=500 and 5×200=1000 illustrate that while TVC doubled, v stayed at $5.
5. Therefore, variable cost per unit remains constant as Q changes (within the relevant operating range).

Why the correct answer is correct:
Because by definition variable cost per unit is the constant increment in cost for each additional unit produced; multiplying that constant by quantity gives total variable cost, which changes in direct proportion to activity. This is the standard cost-behavior assumption used in costing and managerial accounting.

Why other choices are incorrect:
- "It varies in increasing proportion..." and "It varies in decreasing proportion..." describe changes in per-unit cost, which do not apply to variable cost per unit (the first could confuse TVC with per-unit cost; the second is opposite of typical variable or fixed behavior).
- "It varies in direct proportion with the activity level." describes total variable cost (TVC), not the per-unit amount.

Conclusion: The correct choice is "It remains constant with changes in the activity level." This matches the provided answer.

Which of the following describes the behavior of a variable cost per unit?单项选择题

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