Expenses that change on a per-unit basis when production volume increases or decreases are known as ________.
A)variable costs
B)manufacturing overhead costs
C)marketing and sales expenses
D)indirect costs
E)operating costs

Question

Quizplus · Accepted Answer

Variable costs change with the level of production, hence they are directly proportional to the increase or decrease in production volume. The other options such as manufacturing overhead costs, marketing and sales expenses, and indirect costs may or may not change with the change in production volume. Operating costs may refer to both fixed and variable costs.

Expenses That Change on a Per-Unit Basis When Production Volume