[amp_mcq option1=”increase in fixed cost” option2=”increase in sales” option3=”increase in production” option4=”increase in efficiency” correct=”option3″]<\/p>\n
The correct answer is C. Increase in production.<\/p>\n
Variable costs are costs that change in direct proportion to the number of units produced. For example, the cost of raw materials is a variable cost, because the more units you produce, the more raw materials you will need.<\/p>\n
Fixed costs are costs that do not change in proportion to the number of units produced. For example, the cost of rent is a fixed cost, because it does not matter how many units you produce, you will still need to pay rent.<\/p>\n
Increase in sales does not necessarily lead to increase in variable cost. For example, if you sell more units, but you do not produce more units, then your variable cost will not increase.<\/p>\n
Increase in efficiency does not necessarily lead to increase in variable cost. For example, if you become more efficient at producing units, then you may be able to produce the same number of units with less variable cost.<\/p>\n
Therefore, the only option that can lead to increase in total variable cost is C. Increase in production.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”increase in fixed cost” option2=”increase in sales” option3=”increase in production” option4=”increase in efficiency” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-43334","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n