Question

Which of the following is an example of a cost that varies in total as the number of units produced changes? a.salary of a production supervisor b.straight-line depreciation on factory equipment c.direct materials cost d.property taxes on factory buildings

Answer 1

Answer:

The correct answer is letter "A": salary of a production supervisor.

Explanation:

Variable Costs vary depending on the company's production volume. Variable costs go up when the company produces more goods or services and go down when it produces fewer goods or services. This is compared to fixed costs which do not change in proportion to production volume.

Direct materials, production supplies, commissions, and fees are examples of variable costs. The salary of a production supervisor would fall under this category.