Why would labor be treated as a variable cost?
A) they are costs incurred in the act of producing that will decrease with quantity produced
B) they are made before production starts and vary according to the specific line of business
C) labor costs are an input cost that firms are unable to change in the short run
D) producing larger quantities of a good or service generally requires more workers

Question

Quizplus · Accepted Answer

Labor is considered a variable cost because as the production volume changes, the amount of labor required typically changes as well. For instance, producing more goods or services usually necessitates hiring more workers, hence increasing the labor cost.

Why Would Labor Be Treated as a Variable Cost