Question

Which of the following is variable cost?

• A. Wages of labour
• B. Prices of raw material
• C. Fuel and power used
• D. All of the above

Answer 1

The correct option is D All of the above

All these factors are costs that are directly proportional to the level of production. If zero output is being produced then these costs do not have to be incurred. These costs vary with the level of output produced. Therefore, they are classified as variable costs.