2-10 No. A variable cost is a cost that varies,
ring. Appraisal costs are incurred to detect de-
in total, in direct proportion to changes in the
fects before they can create further problems.
level of activity. A variable cost is constant per
Internal and external failure costs are incurred
unit of product. A fixed cost is fixed in total, but
as a result of producing defective units.
will vary inversely on an average per-unit basis
with changes in the level of activity.
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