Question

A cost that rises or falls depending on how much is produced is _____. a variable cost an operating cost a labor cost a fixed cost

Answer 1

Answer: A: variable cost

A cost that rises or falls depending on how much is produced is variable cost.

Explanation:

Variable cost refers to cost that change in proportion to the amount of goods produced. It increases or decreases depending on the volume of production. It rises as a result of increase in production and fall as a result of decrease in production. Examples are:  cost of raw materials, packaging, labour involved in direct manufacturing process and so on.