Variable costs are defined as costs that
A)vary depending on the number of units produced or sold.
B)change only during economic downturns.
C)vary depending on the advertising budget for the product.
D)remain constant even though the product offering varies.
E)vary depending on the type of material used in production.

Question

Quizplus · Accepted Answer

Variable costs are specifically those costs which vary directly with the quantity of output produced or sold. Examples of variable costs include direct labor costs, raw material costs, and commissions paid to sales personnel, all of which increase as production increases. The other choices, such as advertising budget and product offering, are not necessarily related to variable costs.

Variable Costs Are Defined as Costs That