Which of the following is most likely to be considered a variable cost?
A)Depreciation on equipment.
B)The cost of labor used in production.
C)Insurance on the factory.
D)Rent on a storage facility.

Question

Quizplus · Accepted Answer

The cost of labor used in production is the most likely to be considered a variable cost as it is directly related to the level of production. The more products manufactured, the more labor will be required, and therefore, the cost of labor will vary depending on the level of production. Depreciation on equipment, insurance on the factory, and rent on a storage facility, are fixed costs as they do not vary with the level of production.

Which of the Following Is Most Likely to Be Considered