The sum of the expenses of the firm that vary directly with the quantity of the product that is produced and sold is referred to as
A)fixed cost.
B)total cost.
C)marginal cost.
D)administrative cost.
E)variable cost.

Question

Quizplus · Accepted Answer

The sum of expenses that vary directly with the quantity of the product produced and sold is referred to as variable cost. This cost varies in proportion to the increase or decrease in the production or sales volume. Therefore, Option E is the correct answer. Fixed cost refers to those expenses that remain constant regardless of the production or sales volume. Total cost refers to the sum of fixed cost and variable cost. Marginal cost is the additional cost incurred by producing one additional unit of the product. Administrative cost refers to the cost incurred in conducting the operations of the firm.

The Sum of the Expenses of the Firm That Vary