If Production Increases by 30%, How Will Total Variable Costs

question 243

Multiple Choice

If production increases by 30%, how will total variable costs likely react?

• A)Increase by 15%
• B)Decrease by 30%
• C)Increase by 30%
• D)Remain the same

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Definitions:

Mass Production

The large-scale manufacturing of goods using standardized designs and assembly-line techniques to achieve greater efficiency.

Customized Production

A manufacturing process in which products are designed and produced to meet specific customer requirements.

Target Cost

A pricing strategy that involves determining the desired cost for a product in order to meet a specified profit margin by working backwards from a competitive market price.

Job Costing

A cost accounting method used to track the costs associated with producing individual jobs, allowing businesses to estimate profitability on a per-job basis.