[amp_mcq option1=”related total costs” option2=”related fixed cost” option3=”related variable cost” option4=”related per unit cost” correct=”option3″]<\/p>\n
The correct answer is: C. related variable cost<\/strong><\/p>\n A variable cost is a cost that changes in direct proportion to changes in the level of activity. For example, the cost of raw materials used in manufacturing a product is a variable cost, because it will increase as the number of units produced increases.<\/p>\n A fixed cost is a cost that remains constant regardless of the level of activity. For example, the cost of rent for a factory is a fixed cost, because it will not change even if the number of units produced increases or decreases.<\/p>\n A per unit cost is the total cost divided by the number of units produced. For example, if the total cost of producing 100 units is $1000, then the per unit cost is $10.<\/p>\n In estimation of cost functions, variations in a single activity level represents the related variable cost. This is because the variable cost is the only type of cost that will change in direct proportion to changes in the level of activity.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”related total costs” option2=”related fixed cost” option3=”related variable cost” option4=”related per unit 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":[952],"tags":[],"class_list":["post-58901","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n