Question

Which of the following costs is most likely a variable cost for Hewlett-Packard, a manufacturer of computers and printers?

Option 1: Rent for Corporate Office
Option 2: Cost of Raw Materials
Option 3: Annual Salary of CEO
Option 4: Depreciation of Buildings

Answer 1

The Cost of Raw Materials is the most likely variable cost for Hewlett-Packard as it changes with the level of production, unlike fixed costs which remain constant.

Step-by-step explanation:

The variable cost for Hewlett-Packard, a manufacturer of computers and printers, is most likely to be the Cost of Raw Materials. Variable costs are those that change in relation to the level of production. In the case of HP, as more computers and printers are manufactured, the cost of raw materials used for production would increase proportionally. Fixed costs, such as Rent for Corporate Office, Annual Salary of CEO, and Depreciation of Buildings, would remain constant regardless of the number of units produced.