Variable Costs Are the Costs of ________

question 149

Multiple Choice

Variable costs are the costs of ________.

• A) raw materials and labor
• B) the last unit of production
• C) rent and equipment
• D) all expenses incurred by the firm

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Definitions:

Total Fixed Cost

It encompasses all the expenses that do not change regardless of the business activity volume, such as rent and salaries.

Servicing Materials

Supplies or materials used in the maintenance and repair of products or equipment.

Planning Budget

A budget created at the beginning of the budgeting period that is valid for a planned level of activity.

Fixed Cost

A cost that does not change with the level of production or sales volume, remaining constant even when output varies.