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

Question

Quizplus · Accepted Answer

The cost of rework is likely to vary based on the level of production or volume of output. When there is a higher level of production, the potential for defects and errors also increases, leading to a higher amount of rework required. Conversely, lower production volumes will result in lower rework costs. Therefore, the cost of rework exhibits variable cost behavior.

Select the Appropriate Cost Behaviour for the Following Costs Incurred