What type of cost exhibits the behavior that follows?
A)Variable cost.
B)Fixed cost.
C)Semivariable cost.
D)Discretionary fixed cost.
E)Step-fixed cost.

Question

What type of cost exhibits the behavior that follows? 
A)Variable cost. 
B)Fixed cost. 
C)Semivariable cost. 
D)Discretionary fixed cost. 
E)Step-fixed cost.

Quizplus · Accepted Answer

The given behavior is not a constant amount and changes with the level of production. This indicates that it is a variable cost. Fixed costs remain constant and do not change with production levels. Semivariable costs have both variable and fixed components, but the behavior described is not consistent with a semivariable cost. Discretionary fixed costs and step-fixed costs are both types of fixed costs and do not exhibit the behavior described.

What Type of Cost Exhibits the Behavior That Follows