Asked by anthony triguero on May 20, 2024
Verified
_____ include(s) direct labor and direct materials as well as other items that go up and down with sales, such as commissions.
A) Expenses
B) Overhead
C) Variable cost
D) Depreciation
Variable Cost
A cost that varies directly with the level of production or volume of output, as opposed to fixed costs, which remain constant regardless of activity level.
Direct Labor
The wages of employees who are directly involved in the production of goods or services.
Direct Materials
Raw materials that are used directly in the manufacturing of a product and can be directly attributed to the product.
- Recognize the effect that fixed and variable expenditures have on the financial success and risk exposure of businesses.
Verified Answer
ER
Erika ReamesMay 25, 2024
Final Answer :
C
Explanation :
Variable costs are costs that vary directly with the level of production or sales, such as direct labor, direct materials, and commissions. As sales increase, variable costs increase proportionally, and as sales decrease, variable costs decrease accordingly.
Learning Objectives
- Recognize the effect that fixed and variable expenditures have on the financial success and risk exposure of businesses.