[amp_mcq option1=”Fixed cost” option2=”Semi-variable cost” option3=”Variable cost” option4=”Absorption cost” correct=”option3″]<\/p>\n
The correct answer is: C. Variable cost<\/strong><\/p>\n A variable cost is a cost that changes in proportion to the changes in the volume of output. For example, the cost of raw materials is a variable cost because it increases as the number of units produced increases.<\/p>\n A fixed cost is a cost that remains constant regardless of the changes in the volume of output. For example, the cost of rent is a fixed cost because it does not change even if the number of units produced increases or decreases.<\/p>\n A semi-variable cost is a cost that has both fixed and variable components. For example, the cost of electricity is a semi-variable cost because it has a fixed component (the cost of the meter) and a variable component (the cost of the actual electricity used).<\/p>\n An absorption cost is a cost that includes both variable and fixed costs. For example, the cost of a product sold would include the cost of the materials used to make the product, the cost of the labor used to make the product, and the cost of the overhead associated with making the product.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Fixed cost” option2=”Semi-variable cost” option3=”Variable cost” option4=”Absorption cost” 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":[12],"tags":[],"class_list":["post-51953","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n