Question

Amazon.com incurs costs every time goods are put in storage and then, again, when the goods are removed to be shipped to customers. This physical handling is a ___ cost?

1) Fixed
2) Variable
3) Direct
4) Indirect

Answer 1

Amazon.com's physical handling costs for goods storage and shipment are variable costs, as they change with the level of output.Amazon.com incurs costs every time goods are put in storage and then, again, when the goods are removed to be shipped to customers. This physical handling is a Variable cost

Step-by-step explanation:

The physical handling costs incurred by Amazon.com when goods are put into storage and later removed to be shipped to customers are a type of variable cost. Variable costs vary with the level of output; they are not fixed like rent or equipment costs, which remain the same regardless of production levels. In contrast, the costs of processing, handling, and shipping goods increase with each additional unit that is handled or shipped.