Which of the following is an example of a variable cost for a bakery?
A) monthly mortgage payment for the building
B) monthly loan payment for ovens
C) fire insurance payments
D) flour and other ingredients for baking
E) property taxes

Question

Quizplus · Accepted Answer

Variable costs change based on the level of production. For a bakery, the cost of flour and other ingredients directly varies with the amount of baking done, making it a variable cost. Fixed costs, such as mortgage payments, loan payments, fire insurance, and property taxes, do not change with the level of production.

Which of the Following Is an Example of a Variable