Which of the following is not an example of a cost that varies in total as the number of units produced changes?
A) electricity per KWH to operate factory equipment
B) direct materials cost
C) insurance premiums on factory building
D) wages of assembly worker

Question

Quizplus · Accepted Answer

Insurance premiums on factory building are typically fixed costs that do not change with the number of units produced. A) represents a variable cost as the more units produced, the more electricity needed to operate factory equipment. B) represents a variable cost as the more units produced, the more direct material is needed. D) represents a variable cost as the more units produced, the more assembly workers are needed and thus, wages paid increase.

Which of the Following Is Not an Example of a Cost