Which of the following is a characteristic of a variable cost?
A)Variable costs fluctuate in total with production and sales.
B)Variable costs are fixed in total.
C)Variable costs do not change in total over any range.
D)All of the above may be characteristic of a variable cost.

Question

Quizplus · Accepted Answer

A characteristic of variable costs is that they fluctuate in total with production and sales. This means that as a company produces and sells more, the total cost of variable expenses will increase, and as production and sales decrease, the total cost of variable expenses will decrease as well. B and C are incorrect because they are not characteristics of variable costs. Variable costs are not fixed in total (like a fixed cost), nor do they remain unchanged over any range (like a step cost).

Which of the Following Is a Characteristic of a Variable