The cost of raw materials used to produce a good or service represent the firm's ________ costs.
A) fixed
B) variable
C) mixed
D) uncontrollable

Question

Quizplus · Accepted Answer

Variable costs are those costs that change according to the level of production. Since a firm will typically need to buy more raw materials and component parts when it increases its production levels, it will find these costs are variable.

The Cost of Raw Materials Used to Produce a Good