Busıness Fınance I Deneme Sınavı Sorusu #854753
I. They increase or decrease depending on company's production volume.
II. They are the expenses that have to be paid by a company, independent of any business activity.
III. They are corporate expenses that change in proportion with production output.
Which of the statements above are true regarding a variable cost?
Only I |
I an II |
II and III |
I and III |
I, II and III |
A variable cost is a corporate expense that changes in proportion with production output.Variable costs increase or decrease depending on a company’s production volume; they rise as production increases and fall as production decreases.A fixed cost is an expense or cost that does not change with an increase or decrease in the number of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any business activity. Therefore, the correct answer is D.
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