When a cost formula is used to describe a mixed (semi-variable) cost behavior pattern, total costs are expected to increase and per unit variable costs are expected to:
remain constant as the level of activity increases.
decrease as the level of activity increases.
decrease as the level of activity decreases.
increase as the level of activity increases.
remain constant as the level of activity increases.

Question

10-12-2022
Business

contestada

When a cost formula is used to describe a mixed (semi-variable) cost behavior pattern, total costs are expected to increase and per unit variable costs are expected to:
remain constant as the level of activity increases.
decrease as the level of activity increases.
decrease as the level of activity decreases.
increase as the level of activity increases.
remain constant as the level of activity increases.

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JitSen257 JitSen257 · Answer 1 · 2022-12-17T04:13:53+01:00

When a cost formula is used to describe a mixed (semi-variable) cost behavior pattern, total costs are expected to rise while per unit variable costs are expected to stay the same as activity levels rise.

What is the semi-variable cost formula?

Semi-variable cost is the sum of fixed and variable costs. Change in cost divided by change in output is variable cost per unit.

What is a cost that is semi-variable?

A cost that is made up of a mix of fixed and variable parts is called a semi-variable cost, a semi-fixed cost, or a mixed cost. After a certain level of production or consumption is exceeded, costs become variable and become fixed.

Learn more about Semi-variable cost here:

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