Which of the following refers to the costs of production that fluctuate depending on the number of units produced? A. Total cost B. Contribution per unit C. Markup D. Variable cost E. Fixed cost

Question

Business

Maxine

15 September, 03:58

Which of the following refers to the costs of production that fluctuate depending on the number of units produced? A. Total cost B. Contribution per unit C. Markup D. Variable cost E. Fixed cost

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Rodney Sherman · Answer 1

Variable cost refers to the costs of production that fluctuate depending on the number of units produced.

Explanation:

The cost of any product that changes based on the quantity of goods that are produced. The volume that is produced decides the fluctuations in the variable cost. Fixed cost is the cost that will not change based on the number of units of the goods that is produced. Rent of a building can be considered as a fixed cost.

Example for variable cost may be raw materials cost, packaging cost, etc. Variable cost can be calculated by adding up the cost of labor and raw materials that are used in the production of one unit of a good. The total variable cost can be calculated by multiplying variable cost per unit with the number of units produced.