Final answer:
True, variable costs change in relation to a company's output level; more output requires more labor and raw materials, increasing these variable costs.
Step-by-step explanation:
The answer to the question is b. True. Variable costs indeed change depending on a company's performance. These costs fluctuate with the level of output produced. When output increases, variable costs, such as labor and raw materials, will typically increase as well. Conversely, if the output decreases, the variable costs will likely decrease too. For example, a company that needs more workers or additional hours of work to produce a greater quantity of a good or service is experiencing an increase in variable costs. This is because labor is considered a variable cost. Similarly, as production scales up, so does the consumption of raw materials, which are also variable costs.