Which of the following is most likely to be a variable cost?

Which of the following is most likely a variable cost? The cost of property Insurance The cost of the machinery used in the production process The cost of furniture used by the staff The cost of electricity used in the production process Which of the following always increases when output increases? Average fixed costs Variable costs Marginal costs Average total costs Which of the following items would be considered a sunk cost: textbook that can be resold, non-refundable tuition payment, laptop that can be used for another class? Textbook and laptop Tuition payment Textbook and tuition payment Textbook, tuition payment, and laptop

Which of the following is most likely a variable cost? The cost of property Insurance The cost of the machinery used in the production process The cost of furniture used by the staff The cost of electricity used in the production process Which of the following always increases when output increases? Average fixed costs Variable costs Marginal costs Average total costs Which of the following items would be considered a sunk cost: textbook that can be resold, non-refundable tuition payment, laptop that can be used for another class? Textbook and laptop Tuition payment Textbook and tuition payment Textbook, tuition payment, and laptop

Answer

8.

The correct option is (d) – the cost of electricity used in
production process.

Variable cost is a cost that varies with the level of output. In
the short-run, variable costs include labor and raw material costs
and in the long run rent, wages, and all other costs.

9.

The correct option is (b).

A variable cost varies with production output. Variable costs
are those costs that vary depending on a company’s production
volume; they rise as production increases and fall as production
decreases.

10.

The correct option is (b) – non refundable tuition fee

Sunk costs are retrospective costs that have already been
incurred and cannot be recovered