Which of the following is an example of a variable cost for a manufacturing firm?
A)The cost of rent on the factory.
B)The cost of factory supervision.
C)The cost of raw materials.
D)The cost of depreciation on equipment.

Question

Quizplus · Accepted Answer

Raw materials are a variable cost because the cost of materials purchased and used in production is directly proportional to the level of production. As the level of production increases, so does the cost of raw materials, making it a variable cost. Rent on the factory, factory supervision, and depreciation on equipment are all fixed costs, which do not vary with the level of production.

Which of the Following Is an Example of a Variable