The variable overhead cost is an example of a:a.Variable costb.Fixed costc.Semi-variable costd.Step cost

The variable overhead cost is an example of a: a. Variable cost b. Fixed cost c. Semi-variable cost d. Step cost.

To determine the correct answer, we need to understand the characteristics of each type of cost.

a. Variable cost: This type of cost varies in direct proportion to the level of production or activity. As the production or activity level increases, the variable cost also increases. Examples of variable costs include direct materials and direct labor.

b. Fixed cost: Fixed costs remain constant regardless of the level of production or activity. These costs do not change with changes in production volume. Examples of fixed costs include rent, insurance, and salaries of permanent employees.

c. Semi-variable cost: Semi-variable costs have both fixed and variable components. The fixed component remains constant, while the variable component changes with the level of production or activity. Examples of semi-variable costs include utilities and maintenance costs.

d. Step cost: Step costs are fixed costs that remain constant within a certain range of production or activity levels, but increase or decrease abruptly when the level crosses a certain threshold. Examples of step costs include hiring additional staff or purchasing new equipment.

Based on the description provided, the variable overhead cost is most likely an example of a variable cost (option a). This is because the variable overhead cost is expected to change in direct proportion to the level of production or activity.

The variable overhead cost is an example of a: a. Variable cost b. Fixed cost c. Semi-variable cost d. Step cost.

To determine the correct answer, we need to understand the characteristics of each type of cost.

a. Variable cost: This type of cost varies in direct proportion to the level of production or activity. As the production or activity level increases, the variable cost also increases. Examples of variable costs include direct materials and direct labor.

b. Fixed cost: Fixed costs remain constant regardless of the level of production or activity. These costs do not change in the short term. Examples of fixed costs include rent, insurance, and salaries of permanent employees.

c. Semi-variable cost: Semi-variable costs have both fixed and variable components. The fixed component remains constant, while the variable component changes with the level of production or activity. Examples of semi-variable costs include utilities and maintenance costs.

d. Step cost: Step costs are fixed costs that remain constant within a certain range of production or activity levels, but increase in steps when the level exceeds a certain threshold. Examples of step costs include hiring additional employees or purchasing new equipment.

Based on the given information, the variable overhead cost is most likely an example of a variable cost (option a). This is because the overhead cost is expected to vary with the level of production or activity.