Which of the following is most likely to be a variable cost for a manufacturer of amusement park rides?
A) annual lease of a tractor-trailer used to deliver rides to buyers
B) executive salaries
C) warehouse rent to store semi-finished and finished rides
D) workers' insurance
E) steel,lumber,and aluminum used in construction of rides

Question

Quizplus · Accepted Answer

Steel, lumber, and aluminum used in the construction of amusement park rides would be considered a variable cost because it would vary depending on the number of rides being manufactured. The other options, such as executive salaries and warehouse rent, would likely be considered fixed costs because they do not directly vary with the production of rides. The annual lease of a tractor-trailer used to deliver rides to buyers may be either a fixed or a variable cost, depending on whether the manufacturer can negotiate a fixed rate or if the cost varies depending on the number of trips required to deliver rides. The workers' insurance cost may also vary, but it is generally considered a fixed cost because it will not directly vary with the number of rides produced.

Which of the Following Is Most Likely to Be a Variable