A cost that changes,in total,in direct proportion to changes in activity levels is a(n):
A)absorption cost.
B)contribution margin.
C)fixed cost.
D)variable cost.

Question

Quizplus · Accepted Answer

A cost that changes in direct proportion to changes in activity levels is known as a variable cost. This means that as the activity level increases, the cost will also increase proportionally. Conversely, if the activity level decreases, the cost will decrease proportionally.

A Cost That Changes,in Total,in Direct Proportion to Changes in Activity