Question

A cost that changes in proportion to changes in volume of activity is a(n): Select one: a. Differential cost. b. Fixed cost. c. Incremental cost. d. Variable cost. e. Product cost.

Answer 1

The correct option is D

Step-by-step explanation:

Variable cost is the corporate cost or an expense which varies in proportion or relation to the production output. Increase or decrease in the variable cost grounded on the production volume of the company or firm, which in short means that increase or rise in variable cost and the production increases and fall in variable cost, production decreases.

Therefore, the cost which changes or varies in the proportion to change in the volume of the activity is known or referred as variable cost.