Asked by Eboni Warren on Jun 11, 2024
Verified
Which of the following best describe the term variable costs.
A) The sales level that results in zero project net income.
B) The sales level where operating cash flow is equal to zero.
C) Costs that change when the quantity of output changes.
D) Options for future, related business products or strategies.
E) A combination of scenario and sensitivity analyses.
Variable Costs
Expenses that change in proportion to the activity of a business, such as materials and labor costs.
Quantity of Output
Refers to the total amount of goods or services produced by a company over a specific period.
Costs
The total expenses incurred by a business in producing goods or providing services.
- Familiarize oneself with the concept and significance of fixed and variable expenses in conducting business activities.
Verified Answer
CG
Cristobal GonzalesJun 14, 2024
Final Answer :
C
Explanation :
Variable costs are those costs that vary directly with the level of output. This means that as the quantity of output changes, the total variable costs change in proportion. Examples include raw materials, direct labor, and some utilities costs.
Learning Objectives
- Familiarize oneself with the concept and significance of fixed and variable expenses in conducting business activities.