There are two categories of variable costs: ________.
A) net variable costs and cost of goods sold
B) gross costs and net variable costs
C) cost of goods sold and other variable costs
D) interest and taxes paid

Question

Quizplus · Accepted Answer

The two categories of variable costs are usually cost of goods sold (COGS) and other variable costs, such as direct labor and materials, utilities, and marketing expenses. Option A is incorrect as net variable costs are not a category of variable costs but a calculation that considers the difference between revenue and variable costs. Option B is incorrect as there is no such thing as gross costs in the context of variable costs. Option D is incorrect as interest and taxes paid are not variable costs but fixed costs.

There Are Two Categories of Variable Costs: ________