Costs that change as output changes are:
A) variable costs.
B) fixed costs.
C) sunk costs.
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

Variable costs are costs that are directly related to changes in output or production. As production increases, variable costs increase and as production decreases, variable costs decrease. Examples of variable costs include costs of raw materials, direct labor costs, and costs of shipping or transporting goods.

Costs That Change as Output Changes Are