If a cost increases as the sales volume increases, the cost is a:

Question

Quizplus · Accepted Answer

Variable costs are costs that change in proportion to the level of activity or output. In other words, as the sales volume increases, so does the variable cost. Direct costs are specifically attributable to a particular product or service, while sunk costs are costs that have already been incurred and cannot be recovered. Fixed costs remain constant regardless of the sales volume. Therefore, the best choice is C, variable cost.

If a Cost Increases as the Sales Volume Increases, the Cost