What is the behaviour pattern of a variable cost?
A)It increases in total as output increases.
B)It remains constant in total at all levels of output.
C)It increases per unit as output increases.
D)It decreases per unit as output increases.

Question

Quizplus · Accepted Answer

Variable costs are directly related to the level of output. As output increases, variable costs also increase in total. This is because variable costs are related to the cost of producing additional units of output, such as the cost of raw materials or labor. As more units of output are produced, more materials and labor are required, increasing the total variable cost.

What Is the Behaviour Pattern of a Variable Cost