What Type of Cost Exhibits the Behavior Shown Below A) Variable Cost

question 83

Multiple Choice

What type of cost exhibits the behavior shown below? $$\begin{array}{l}\text { Manufacturing }\\\begin{array} { c c } \text { Volume (Units) } & \text { Cost Per Unit } \\\hline 50,000 & \$ 1.95 \\70,000 & 1.95\end{array}\end{array}$$

• A) Variable cost.
• B) Fixed cost.
• C) Semivariable cost.
• D) Discretionary fixed cost.
• E) Step-fixed cost.

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead used for budgeting and assessing performance.

Variable Overhead

Costs that vary with the level of production output, such as utilities and commissions.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the actual quantity of materials used.

Variable Manufacturing Overhead

This refers to the manufacturing overhead costs that vary with the level of production, such as utilities or indirect materials.