Question

Outside the relevant range, variable costs, such as direct material costs ________. A) will not change proportionately with changes in production volumes B) will decrease proportionately with changes in sales volumes C) will remain the same with changes in production volumes D) will increase proportionately with changes in sales volumes

Answer 1

Outside the relevant range, variable costs, such as direct material costs will not change proportionately with changes in production volumes

Step-by-step explanation:

Variable costs vary linearly with the production level. Variable costs endure consistent beyond all production levels within the relevant range. Direct materials are recognized as a variable cost. Direct labor may not be a variable cost if the activity is not appended to or deducted from the production manner as production volumes vary.

Most types of overhead are not supposed to a variable cost. Variable costs would diminish with any lessening in production due to lower demand. If production or services are growing, then variable costs should also rise.