Suppose Bev's Bags makes two kinds of handbags-large and small.Bev rents an industrial space where she keeps the fabric,the industrial sewing machine,her measuring board and cutting shears,extra needles,thread and buttons,and labels.Which of the following would be considered a variable cost of this company?

Question

Quizplus · Accepted Answer

The fabric is a variable cost because the amount of fabric needed to create each handbag will vary depending on the size and style of the bag. The rent and cutting shears are fixed costs because they do not vary with the level of production.

Suppose Bev's Bags Makes Two Kinds of Handbags-Large and Small