the assembly plant management wants to estimate the magnitude of the total manufactu 630921

An assembly plant accumulates its variable and fixed manufacturing overhead costs in a single cost pool which are then applied to work in process using a single application base. The assembly plant management wants to estimate the magnitude of the total manufacturing overhead costs for different volume levels of the application activity base using a flexible budget formula. If there is an increase in the application activity base that is within the relevant range of activity for the assembly plant, which one of the following relationships regarding variable and fixed costs is correct?

1. The variable cost per unit is constant, and the total fixed costs decrease.
2. The variable cost per unit is constant, and the total fixed costs increase.
3. The variable cost per unit and the total fixed costs remain constant.
4. The variable cost per unit increases, and the total fixed costs remain constant.