Question

Variable cost per unit ___________________.

• A. Remains fixed
• B. Fluctuates with volume of production
• C. Varies in consideration with the volume of sales
• D. None of the above

Answer 1

The correct option is B Fluctuates with volume of production

Cost may be classified as fixed cost and variable cost.

Fixed cost is that cost which remains constant in terms of value. It does not change with the level of production. For example, rent or salary.

Variable cost is just opposite to fixed cost. Its fixed in terms of per unit but fluctuate with the level of production. For example, raw material cost.