Ginnie's, a candy manufacturing company, sees a sudden rise in the consumption of its kiwi-flavored candies. Thus, the company hires more labor and buys additional supplies to increase the production of these candies. In this scenario, the costs incurred by the company for purchasing these supplies and hiring more labor exemplify the company's _____.

Question

Quizplus · Accepted Answer

Variable costs are expenses that change in proportion to the production output. In this case, the costs for additional labor and supplies increase as the company ramps up production, making them variable costs.

Ginnie's, a Candy Manufacturing Company, Sees a Sudden Rise in the Consumption