Question

Which of the following would probably be a variable cost in a soda bottling plant? a. Direct labor b. Bottles c. Carbonated water d. Power to run the bottling machine e. All of these

Answer 1

Answer:

Option E

 

Explanation:

A variable cost refers to the business expense that varies in relation to revenue from manufacturing. Based on the volume of output of a business, variable expenses gets significantly impact; these increase as productivity increases, and decline as production declines. Sources regarding variable costs typically involve raw material and storage costs.

Thus, from the above we can conclude that all of the mentioned costs are variable costs as direct labor , bottles and water will all increase as the level of production will increase.