Final answer:
Among the options given, wages are a variable cost because they fluctuate with the level of production, requiring more workers or more work hours when production increases.
Step-by-step explanation:
In the context of business costs, variable costs are expenses that vary directly with the level of output or production quantity. Examples of variable costs include raw materials and labor. Since these costs fluctuate based on the amount of production, they stand in contrast to fixed costs, which remain consistent regardless of the production volume.
Among the options provided:
- Wages are considered a variable cost because the total wages paid out by a company typically increase with additional production, which often requires more workers or more hours worked.
- Rent, on the other hand, is a fixed cost since it generally remains the same each month irrespective of how much a company produces.
- Property taxes are also a fixed cost as they are set for the year and do not fluctuate with the production levels.
- Liability insurance is typically a fixed cost, as the premium is normally a set amount for the coverage period regardless of production levels.
Therefore, the answer to the question is (a) Wages, as it is the example of a variable cost among the provided options.