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Question(s) / Instruction(s):

When a cost formula is used to describe a mixed (semi-variable) cost behavior pattern, total costs are expected to increase and per unit costs are expected to:

 

a.       increase as the level of activity increases.

 

b.      decrease as the level of activity decreases.

 

c.       remain constant as the level of activity increases.

 

d.      decrease as the level of activity increases.

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