A cost which changes in proportion to changes in volume of activity is called
A)fixed cost
B)controllable cost
C)variable cost
D)opportunity cost

Question

Quizplus · Accepted Answer

Variable costs change in proportion to the volume of activity. These costs vary directly with the level of production or other measures of volume. Examples include materials and labor directly involved in a company's production process. Fixed costs, on the other hand, remain constant regardless of activity levels, while controllable costs are those that can be influenced or controlled by management. Opportunity cost represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.

A Cost Which Changes in Proportion to Changes in Volume