Refer to St. John's Company. If output was 5,000 units in March and 10,000 units in April, which of the following can be assumed?
A) Materials are the only variable cost.
B) Utilities and materials are variable costs.
C) Insurance and depreciation are mixed costs.
D) Utilities, insurance, and depreciation are fixed costs.

Question

Quizplus · Accepted Answer

Materials are the only variable cost because the total cost increases in proportion to the increase in output.