Sonia opened a yoga studio where she teaches classes and sells yoga clothing. Variable costs for Sonia's yoga studio include the cost of the
(i)tank tops.
(ii)wages paid to the other yoga instructors.
(iii)lease on the studio space.
(iv)insurance that the landlord requires Sonia to carry for the studio.
A)(i) only
B)(i) and (ii) only
C)(iii) and (iv) only
D)(i), (ii), (iii), and (iv)

Question

Quizplus · Accepted Answer

Variable costs are costs that change with the level of output or activity. The cost of tank tops (i) and wages paid to instructors (ii) are variable costs because they vary with the number of classes taught and clothing sold. The lease (iii) and insurance (iv) are fixed costs, as they do not change with the level of activity.

Sonia Opened a Yoga Studio Where She Teaches Classes and Sells