Which of the following costs changes in total in direct proportion to a change in the activity level?
A)Variable cost.
B)Fixed cost.
C)Semi-variable cost.
D)Step-variable cost.
E)Step-fixed cost.

Question

Quizplus · Accepted Answer

Variable costs are costs that change in total in direct proportion to a change in the activity level. As activity or production increases, variable costs increase, and as activity or production decreases, variable costs decrease. This is because variable costs are based on units produced or materials used, which change with the level of activity. Therefore, the higher the activity level, the higher the variable cost and vice versa.

Which of the Following Costs Changes in Total in Direct