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Unformatted text preview: f the facilities remain constant
at every level of activity - $10,000 per month.
Fixed costs on a per unit basis vary inversely with
activity - as activity increases, unit cost declines
and vice versa.
At 2,000 radios, the unit cost is $5 ($10,000
$5 ($10,000 2,000 units). At 10,000 radios, the unit cost is $1 ($10,000
$1 10,000 units). Chapter
5-11 Fixed Costs - Graphs Chapter
Throughout the range of possible levels of activity,
a straight-line relationship usually does not exist
for either variable costs or fixed costs.
The relationship between variable costs and
changes in activity level is often curvilinear.
For fixed costs, the relationship is also nonlinear –
some fixed costs will not change over the entire
range of activities while other fixed costs may
Relevant Range - Graphs Chapter
Defined as the range of activity over which a
Within this range, a strai...
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This document was uploaded on 01/19/2014.
- Winter '14