Clausel Inc., a furniture manufacturing company, receives a bulk order from a multinational company for 150 office chairs. To complete the order on time, Clausel Inc. speeds up its production process by hiring additional labor and purchasing more supplies. In this scenario, the costs incurred by Clausel Inc. for hiring more labor and buying more supplies exemplify its _____.

Question

Quizplus · Accepted Answer

Variable costs change with the level of production, such as costs for additional labor and supplies needed to fulfill the order.