Which of the following types of costs is the most likely to be classified as variable?
A) Factory rent
B) Factory insurance
C) Direct materials
D) Depreciation of factory building

Question

Quizplus · Accepted Answer

Direct materials are typically the most variable of the options listed because the amount used will vary based on the level of production. The other options are either fixed costs (such as factory rent and depreciation of the factory building) or semi-variable costs with a fixed component (such as factory insurance, which may have a fixed component plus a variable component based on the value of the insured assets).

Which of the Following Types of Costs Is the Most