Total Variable Cost

question 7

Multiple Choice

Total variable cost

• A)is zero when the quantity produced is zero.
• B)is the sum of those changing expenses that are closely related to output.
• C)may increase as the quantity produced is increased.
• D)All these answers are correct.

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Definitions:

Manufacturing Overhead

Manufacturing overhead includes all indirect costs associated with the production process, such as utilities, maintenance, and salaries of non-direct labor employees.

Ceramic Tile

A durable, hard flooring material made from clay that has been fired in a kiln, commonly used for floors, walls, and backsplashes.

Fixed Expense

An expense that does not change with the level of production or sales, such as rent, salaries, and insurance.

Administrative Expense

Costs related to the general administration of a business, including office supplies, salaries of administrative personnel, and utilities.