Three different divisions of a footwear manufacturing company are estimating costs for their human resources departments. Each division has a cost structure that is different from the other divisions' and those structures are represented by the following cost behaviour patterns (A, B, and C).
Number of $\begin{array}{lrrr}\text { Emplovees } & \text { Cost A } & \text { Cost B } & \text { Cost } \mathrm{C}\\hline
0 & \$ 0 & \$ 120 & \$ 118 \
25 & 50 & 118 & 180 \
50 & 100 & 123 & 245 \
75 & 125 & 124 & 296 \
100 & 200 & 119 & 360
\end{array}$
Which cost is best described as variable?
A) Cost A
B) Cost B
C) Cost C
D) Cost A and Cost C

Question

Quizplus · Accepted Answer

Cost A increases consistently with the number of employees, indicating a variable cost structure where costs change in direct proportion to the level of activity (in this case, the number of employees).

Three Different Divisions of a Footwear Manufacturing Company Are Estimating