Three different divisions of a toy manufacturing company are estimating costs for their human resources departments. Each division has a cost structure that is different from the other divisions' and those structures are represented by the following cost behaviour patterns (A, B, and C). Number of
Employees Cost A Cost B Cost C
0 $ 0 $120 $118
25 50 118 180
50 100 123 245
75 125 124 296
100 200 119 360
Which cost is best described as variable?
A)Cost A
B)Cost B
C)Cost C
D)Cost A and Cost C

Question

Quizplus · Accepted Answer

Cost A is best described as variable because it increases with an increase in the number of employees. Costs B and C remain relatively constant despite changes in the number of employees, making them more likely to be fixed costs.

Three Different Divisions of a Toy Manufacturing Company Are Estimating