Multiple Choice QuestionWhich of the following is the correct statement about variable costs?Multiple choice question.The variable cost per unit will decrease when volume increases.The variable cost per unit does not change when volume changes.The variable cost per unit will increase when volume increases.
Question
Multiple Choice QuestionWhich of the following is the correct statement about variable costs?Multiple choice question.The variable cost per unit will decrease when volume increases.The variable cost per unit does not change when volume changes.The variable cost per unit will increase when volume increases.
Solution
The correct statement about variable costs is: "The variable cost per unit does not change when volume changes."
This is because variable costs are costs that change in proportion to the good or service that a business produces. Variable costs are also the sum of marginal costs over all units produced. They can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost. Direct costs, however, are costs that can easily be associated with a particular cost object. However, not all variable costs are direct costs.
Similar Questions
Multiple Choice QuestionWhich of the following is the correct statement about fixed costs?Multiple choice question.The fixed cost per unit will decrease when volume increases.The fixed cost per unit does not change when volume changes.The fixed cost per unit will decrease when volume decreases.The fixed cost per unit will increase when volume increases.
Which of the following is a characteristic of a variable cost?Group of answer choicesUnit variable costs do not change with a change in volume.Total variable costs have an inverse relationship with volume changes.Total variable costs do not change with a change in volume.Unit variable costs change with a change in volume
) Which one of the following is a variable cost?Select one answer. (1)A Rent paidB Management salariesC Insurance agreedD Raw materials
Which of the following is not true for the variable cost?ans.Costs like insurance, license fees, etc are example of variable costEconomic of scale greatly effects variable costInitially with increase in production variable cost per quantity reduces but beyond some point it increases sharplyVariable cost is zero when output quantity is zero Previous Marked for Review Next
Which costs remain constant in total as the budgeted volume of activity changes, but they could change as a result of the managerial decision-making process?Multiple choice question.Variable costsFixed costsMixed costsLabor costs
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.