Which of the following would be classified as a variable cost for the local Texaco station?
A) interest payments to a local bank for a 5-year loan
B) the total wages paid to the workers who are all paid $16.00 per hour, no matter how many hours they work each week
C) the premiums paid for liability insurance, which are constant throughout the life of the contract
D) the opportunity cost of money used to finance the installation of some new pumps

Question

Quizplus · Accepted Answer

Variable costs change with the level of output or activity. The total wages paid to workers, which vary depending on the number of hours worked, would be considered a variable cost.

Which of the Following Would Be Classified as a Variable