Laverne's Soda Shop wishes to decrease variable costs.Which of the following options should she consider?

Question

Quizplus · Accepted Answer

Direct labour costs are variable costs, meaning that they vary with the level of production or sales. Thus, reducing direct labour costs could decrease variable costs for Laverne's Soda Shop. A decrease in advertising costs would likely decrease sales and revenue, making it counterproductive. A decrease in rent would not directly affect variable costs, as rent is a fixed cost. An increase in equipment rentals would increase variable costs.

Laverne's Soda Shop Wishes to Decrease Variable Costs