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Which of the following amounts of a flexible budget changes, within the specified relevant range, with changes in sales volume?

A) sales price per unit
B) total fixed costs
C) variable cost per unit
D) total contribution margin

1 Answer

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Final answer:

The part of a flexible budget that varies with sales volume is the total contribution margin. Costs measured on a per-unit basis include average cost, average variable cost, variable costs, and marginal cost. Production technology encompasses the methods and equipment used to produce goods and services.

Step-by-step explanation:

Within the specified relevant range, the component of a flexible budget that changes with changes in sales volume is D) total contribution margin. The total contribution margin is the difference between total sales and total variable costs; as sales volume changes, both total sales and total variable costs will change, affecting the total contribution margin.

On a per-unit basis, the costs measured include average cost, average variable cost, variable costs, and marginal cost. Fixed costs are not measured on a per-unit basis because they do not change with production volume.

Production technology refers to the methods, processes, and equipment used by firms to produce goods and services. Understanding production technology is crucial for determining the efficiency with which inputs can be transformed into outputs and can influence both fixed and variable costs.

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