Which of the Following Is Likely a Variable Cost

question 159

Multiple Choice

Which of the following is likely a variable cost?

• A)Hourly wages
• B)Fuel
• C)Raw materials
• D)Shipping
• E)All of these choices are variable costs.

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Definitions:

Real Return

The rate of return on an investment after adjusting for inflation.

Nominal Rate

Typically refers to the interest rate agreed upon in the financing agreement before any adjustment for inflation.

Inflation Rate

The rate of growth in the broad cost of goods and services, which adversely affects the power of procurement.

Real Rate

The interest rate that has been adjusted for inflation, representing the real cost of funds to the borrower and the real yield to the investor.