Response to the following questions:
1. Describe the behavior of (a) total fixed costs and (b) unit fixed costs as the level of activity increases.
2. How would each of the following costs be classified if units produced is the activity base?
a. Salary of factory supervisor ($120,000 per year)
b. Straight-line depreciation of plant and equipment
c. Property rent of $11,500 per month on plant and equipment