Which of the following statements is true concerning variable costs?
A)Variable costs are likely to respond to the amount of attention devoted to them by a management.
B)Variable costs are associated with marketing,shipping,warehousing,and billing activities.
C)Variable costs do not change in total for a given period but decrease on a per unit basis.
D)Variable costs change in total with changes in production activity.

Question

Quizplus · Accepted Answer

Variable costs are costs that change in total with changes in production activity. As the level of production increases, variable costs also increase. Variable costs include expenses such as direct labor, direct materials, and sales commissions that vary based on the number of units produced or sold. Therefore, option D is the correct choice. Option A is incorrect because variable costs will respond to changes in production activity rather than management attention. Option B is incorrect because variable costs primarily relate to production activities, not marketing, shipping, warehousing, or billing activities. Option C is incorrect because variable costs may increase or decrease on a per unit basis with changes in production activity.

Which of the Following Statements Is True Concerning Variable Costs