A cost that changes in total in proportion to changes in volume of activity is a(n):
A)Differential cost.
B)Fixed cost.
C)Incremental cost.
D)Variable cost.
E)Product cost.

Question

Quizplus · Accepted Answer

A cost that changes in total in proportion to changes in volume of activity is called variable cost. This means that as the volume of activity increases, the total variable cost also increases proportionately, and as the volume of activity decreases, the total variable cost also decreases proportionately.

A Cost That Changes in Total in Proportion to Changes