Costs that vary in total in direct proportion to changes in an activity level are called ______ costs.
A)fixed
B)sunk
C)variable
D)differential

Question

Quizplus · Accepted Answer

Variable costs change in direct proportion to changes in activity level, meaning they increase as activity increases and decrease as activity decreases. Fixed costs remain constant regardless of activity levels, sunk costs are past costs that cannot be recovered, and differential costs are the difference in cost between two alternatives.

Costs That Vary in Total in Direct Proportion to Changes