The example you provided describes Variable costs. Variable costs are expenses that change in proportion to the level of production. As production increases, the need for materials and labor also increases.
When opening a business, an owner will have some costs that increase and decrease as production
changes. For example, if Birdhouse, Inc. has an increase in orders for birdhouses, their need for wood,
glues, paint, and labor will also increase. What type of cost does this example describe?
(1 point)
O Fixed
O Start-up
O Variable
O Debt
1 answer
1 answer