Question

When sales double, a pizza restaurant finds its costs for sauce, dough and electricity increase, because these are __________.

Answer 1

The costs of sauce, dough and electricity increase, because these are variable costs.

Variable costs are costs that change with the level of output. When output increases, variable costs increases and when output declines, variable cost decreases. When the demand for pizza increases, variable input would increase and this would increase variable costs.

On the other hand, fixed costs are costs that do not variable with the level of output.

To learn more about variable cost, please check: brainly.com/question/25879561