COST ACCOUNTING
COST BEHAVIORS
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -Variable costs are directly proportional to the level of production. If zero output is being produced then these costs do not have to be incurred.
Detailed explanation-2: -Variable costs are any expenses that change based on how much a company produces and sells. This means that variable costs increase as production rises and decrease as production falls. Some of the most common types of variable costs include labor, utility expenses, commissions, and raw materials.
Detailed explanation-3: -Direct Variable Costs means the resources and supplies directly consumed in the manufacture of such Product, including, but not limited to, the cost of labor and raw materials.
Detailed explanation-4: -The variable costs depend on the production volume of a company. The variable costs fall within the category of direct costs.