Asked by Ankush Aggarwal on Jul 07, 2024
Verified
Which of the following is most likely to be a variable cost?
A) Fuel and power payments.
B) Interest on business loans.
C) Rental payments on IBM equipment.
D) Real estate taxes.
Variable Cost
Costs that vary directly with the level of production or service provision, increasing as production increases and decreasing as production decreases.
Fuel Payments
Money expended to cover the cost of fuel, often in the context of transportation, heating, or energy production.
- Pinpoint and examine the fixed and variable expenditures involved in short-term production.
Verified Answer
VH
Vanessa HowardJul 09, 2024
Final Answer :
A
Explanation :
Fuel and power payments are likely to vary directly with the level of production or sales, making them a variable cost. Interest on business loans, rental payments, and real estate taxes are typically fixed costs.
Learning Objectives
- Pinpoint and examine the fixed and variable expenditures involved in short-term production.
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