ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is most likely to be a variable cost?
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Property insurance premiums
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Interest on bonded indebtedness
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Rental payments on IBM equipment
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Payment for raw materials purchased from Company Y
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Explanation:
Detailed explanation-1: -Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees.
Detailed explanation-2: -Answer and Explanation: 1. The correct answer is A. Direct Materials.
Detailed explanation-3: -Labour is the factor of production is most likely to be variable in the short run. Variable labour costs are any labour costs that go up or down with production levels.
Detailed explanation-4: -Direct materials and supervisory salaries are the most likely variable costs. 2. Calculate the total cost. The total cost is made up of direct materials, supervisory salaries, and depreciation of factory equipment.
There is 1 question to complete.