Select the appropriate cost behaviour for the following costs incurred by a bicycle manufacturer.
-Cost of tires
A)Variable
B)Fixed

Question

Quizplus · Accepted Answer

The cost of tires is a variable cost because it varies with the level of production. As the manufacturer produces more bicycles, they will need to purchase more tires, increasing the total cost. Alternatively, if they produce fewer bicycles, they will need to purchase fewer tires, reducing the total cost.

Select the Appropriate Cost Behaviour for the Following Costs Incurred