Which of these is a variable cost?

Rent of the factoryCorrect answerYour answerSalary of the permanent managerCorrect answerYour answerInsurance premium on the buildingCorrect answerYour answerRaw materialsCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

Raw materials are bought in proportion to output, so their cost varies with it.
Rent, a permanent salary and insurance stay the same whatever is produced.

Concept: Variable cost
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsFixed and variable cost

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Ten questions from Cost Curves, at your own pace.

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Ten questions from Cost Curves, at your own pace.

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Which of these is a variable cost?

Explanation