Which of the Following Is Not an Example of a Variable

question 18

Multiple Choice

Which of the following is not an example of a variable cost?

• A) Straight-line depreciation on a machine that has a five-year service life.
• B) Wages of manufacturing workers whose pay is based on hours worked.
• C) Tires used in the production of tractors.
• D) Aluminum used to make patio furniture.
• E) Commissions paid to sales personnel.

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Definitions:

Product Unit Cost

The total cost associated with producing a single unit of a product, encompassing both direct materials and direct labor costs.

Direct Materials

Raw materials that are directly traceable to the production of specific goods or products.

Variable Overhead

Costs that fluctuate with production volume, such as electricity for manufacturing equipment, excluding fixed costs.

Excess Capacity

A situation where a company can produce more goods or provide more services than currently demanded, indicating unused productive potential.