The typical relationship between variable costs and volume may be described best as follows:
A) Costs increase in an erratic, unpredictable fashion with changes in volume.
B) Costs stay fairly constant with changes in volume.
C) Costs increase with changes in volume up to a certain point and then remain constant.
D) Costs increase in direct proportion to increases in volume.

Question

Quizplus · Accepted Answer

Variable costs increase in direct proportion to increases in volume because they are costs that vary with the level of output or sales.

The Typical Relationship Between Variable Costs and Volume May Be