Which of the following is an example of a cost that is variable with respect to the number of units produced?
A)Rent on the administrative office building.
B)Rent on the factory building.
C)Direct labor cost, where the direct labor workforce is adjusted to the actual production of the period.
D)Salaries of top marketing executives.

Question

Quizplus · Accepted Answer

Direct labor cost is a variable cost because the number of direct labor workers needed will vary depending on the production level. The other options are fixed costs that do not change with the number of units produced. Rent on the administrative office building and salaries of top marketing executives are examples of fixed costs, while rent on the factory building is an example of a mixed cost (part fixed, part variable).

Which of the Following Is an Example of a Cost