Variable costs are those costs that:
A)vary inversely with changes in activity.
B)vary directly with changes in activity.
C)remain constant in total as activity changes.
D)decrease on a per-unit basis as activity increases.
E)increase on a per-unit basis as activity increases.

Question

Quizplus · Accepted Answer

Variable costs are those costs that vary directly with changes in activity. As the volume of activity increases, variable costs will also increase, and conversely, they will decrease when the volume of activity decreases. Examples of variable costs include direct materials, direct labor, and sales commissions.

Variable Costs Are Those Costs That