Which one of the following costs is most likely a variable cost?
A) Rent paid on an office building.
B) Cost of an equipment lease.
C) Cost of cotton used to produce a shirt.
D) Cost of a computer to process payroll checks.
E) Salary paid to the chief financial officer.

Question

Quizplus · Accepted Answer

Variable costs change with the level of production. The cost of cotton used to produce a shirt is a variable cost because it varies directly with the number of shirts produced.

Which One of the Following Costs Is Most Likely a Variable