Question
34. Which of the following is most likely an example of a variable cost? a. Rent b. Raw materials c. Insurance d. Managers salaries
Answer
4.2
(150 Votes)
Nicole
Elite · Tutor for 8 years
Answer
b
Explanation
A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease with the volume of production. While rent, insurance, and managers' salaries are typically fixed costs that do not fluctuate with the company's level of production or sales, raw materials are a type of variable cost. The more products a company produces, the more raw material it would need; correspondingly, the cost associated with raw materials would increase. So, most likely, raw materials would be considered a variable cost for a business.