Question

Costs which do not vary with the amount a business produces are referred to as Group of answer choices opportunity costs. total costs. fixed costs. variable costs.

Answer 1

Variable costs are a company's costs that are associated with the number of goods or services it produces. A company's variable costs increase and decrease with its production volume. When production volume goes up, the variable costs will increase. On the other hand, if the volume goes down, so too will the variable costs.

Variable costs are generally different between industries. Therefore, it's not useful to compare the variable costs of a car manufacturer and an appliance manufacturer, for example, because their product output isn't comparable. So it's better to compare the variable costs between two businesses that operate in the same industry, such as two car manufacturers.

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