# GENERAL KNOWLEDGE

## GK

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Proportional costs ____
 A Are directly proportional to the volume of production B Rise less than proportional to production increase C Increase more than proportional to production increase D Do not change in relationship to production
Explanation:

Detailed explanation-1: -Proportional costs are those costs that are directly pro-portional to the volume of production. The cost function of proportional costs is given by a line which goes through the origin.

Detailed explanation-2: -Variable costs change in proportion to the quantity of output. As production quantity increases, the cost increases; as production quantity decreases, so do the costs. Most accounting textbooks depict variable costs as varying directly with volume.

Detailed explanation-3: -Detailed Solution. Marginal cost is directly proportional to its Variable costs. Marginal cost is the increase in the total cost when one more product is produced.

Detailed explanation-4: -Answer and Explanation: A cost that changes in proportion to changes in volume of activity is called c) a variable cost. Variable costs are those tied directly to production and rise and fall depending on what work a business does.

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