Direct material costs are not always linear variable costs as a result of quantity discounts on direct material purchases.

Question

Quizplus · Accepted Answer

Quantity discounts can cause direct material costs to be non-linear because the price per unit of direct materials may decrease as larger quantities are purchased. This means that the cost per unit of direct material may not remain constant as the level of production increases.

Direct Material Costs Are Not Always Linear Variable Costs as a Result