ECONOMICS

Detailed explanation-1: -A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease depending on a company’s production or sales volume-they rise as production increases and fall as production decreases.

Detailed explanation-2: -Variable costs vary in direct proportion to a change in an activity base. Discretionary costs are costs which can be avoided. Discretionary costs are typically fixed in nature.

Detailed explanation-3: -Answer and Explanation: It is true that total variable costs change in proportion to changes in the volume of activity. Variable costs include components or direct labor that are applied to making a product and can change depending on how busy the company is.

Detailed explanation-4: -Fixed costs: The total amount of fixed costs remains unchanged when volume changes, within a relevant range of operations. The relevant range of operations is the normal operating range for a business, with existing machinery.

Detailed explanation-5: -Variable costs are expenses that change directly and proportionally to the changes in business activity level or volume.