Which expense varies directly with production?
A) Depreciation of equipment
B) Managers salary
C) Direct materials
D) Insurance

Question

Quizplus · Accepted Answer

Direct materials are the cost of raw materials used in production, which varies directly with the level of production. The more production, the more raw materials needed. The other expenses may not necessarily vary directly with production. Depreciation of equipment may be affected by usage but can also be based on a specific period of time or fixed amount. Managers salary and insurance may be fixed, regardless of the level of production.

Which Expense Varies Directly with Production