A characteristic of a variable cost is
A)the total cost varies in proportion to changes in the level of activity.
B)the cost per unit remains constant,regardless of the level of activity.
C)both that the total cost varies in proportion to changes in the level of activity and that the cost per unit remains constant,regardless of the level of activity.
D)neither that the total cost varies in proportion to changes in the level of activity nor that the cost per

Question

Quizplus · Accepted Answer

A variable cost is a cost that changes in proportion to changes in the level of activity. As the level of activity increases, the total cost of the variable cost increases, and as the level of activity decreases, the total cost of the variable cost decreases. This is in contrast to a fixed cost, which remains constant regardless of the level of activity. The cost per unit of a variable cost may or may not remain constant, depending on whether there are any economies or diseconomies of scale in production.

A Characteristic of a Variable Cost Is