Which of the following is a variable cost?
A)A cost that is $26,000 when production is 65,000,and $26,000 when production is 91,000.
B)A cost that is $26,000 when production is 65,000,and $36,400 when production is 91,000.
C)A cost that is $26,000 when production is 65,000,and $52,000 when production is 91,000.
D)A cost that is $52,000 when production is 65,000,and $52,000 when production is 91,000.

Question

Quizplus · Accepted Answer

A variable cost is a cost that changes in proportion to the level of activity or production. In this case, the cost increases from $26,000 to $36,400 as production increases from 65,000 to 91,000, making it a variable cost. Option A has a fixed cost as the cost remains the same even when production increases. Option C and D have fixed costs as the cost does not change with the changes in production.

Which of the Following Is a Variable Cost