In breakeven analysis, the costs that change with the level of production are considered ______ costs.
A) variable
B) recoverable
C) labour
D) fixed

Question

Quizplus · Accepted Answer

Variable costs are costs that change with the level of production, such as raw materials, direct labor, and sales commissions. Fixed costs, on the other hand, remain the same regardless of changes in production levels. Recoverable costs and labor costs do not necessarily change with production levels and are not considered in the context of breakeven analysis.

In Breakeven Analysis, the Costs That Change with the Level