An example of a variable cost is:
A)a payment to your raw materials supplier.
B)a lease payment on a piece of equipment.
C)a mortgage payment on buildings.
D)a monthly licensing fee for a software package.

Question

Quizplus · Accepted Answer

A payment to your raw materials supplier would be considered a variable cost because it varies based on the level of production or sales. As production or sales increase, the cost of raw materials would also increase. The other options are examples of fixed costs because they do not vary based on the level of production or sales.

An Example of a Variable Cost Is