A cost that is considered variable for one activity base may be considered fixed for a different activity base.

Question

Quizplus · Accepted Answer

The classification of a cost as variable or fixed depends on the activity base used to measure it. For example, the cost of rent may be considered fixed when measured per month, but variable when measured per unit of production. Therefore, a cost that is variable for one activity base may be considered fixed for a different activity base.

A Cost That Is Considered Variable for One Activity Base