Variable costs:
A) change as the quantity of output changes.
B) are zero when production is zero.
C) are exemplified by direct labor and raw materials.
D) All of these.
E) None of these.

Question

Quizplus · Accepted Answer

Variable costs are the costs that vary with the level of production or output. Therefore, they change as the quantity of output changes - A is correct. Variable costs are not zero when production is zero, so B is incorrect. Examples of variable costs include direct labor and raw materials, making C correct. Therefore, D is the correct answer - all of these statements are true.

Variable Costs