Which of the Following Costs Are Variable

question 12

Multiple Choice

Which of the following costs are variable?

• A) 1 and 2
• B) 1 and 4
• C) only 1
• D) only 2

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Definitions:

Average Total Cost

The cost per unit of output, determined by dividing the overall production cost by the quantity produced.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced.

Variable Cost

A cost that changes with the level of output or production.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost per unit of output.