Which of the following is a characteristic of a variable cost?
A) Variable costs are variable per unit, and fixed in total.
B) Variable costs vary in total with production and sales.
C) Variable costs do not change in total over the relevant range.
D) All of the above are characteristics of variable costs.

Question

Quizplus · Accepted Answer

Variable costs vary in total with the level of production or sales. This means that as production increases, the total variable costs increase, and as production decreases, the total variable costs decrease. This characteristic distinguishes variable costs from fixed costs, which remain constant in total regardless of production levels.

Which of the Following Is a Characteristic of a Variable