What does the cost of goods or services sold include? A variable cost creates changes in the proportion of the production output. Understanding Semi-Variable Costs . Total fixed costs will not change. A. The fixed portion of a semi-variable cost is incurred no matter the activity volume, while the variable portion occurs as a … Gravity. What are implicit costs? Which of the following is a variable expense? Fixed Costs and Variable Costs: The total fixed costs are constant when there is a change in outputs produced. Expense that stays the same from month to month. On the other hand, the fixed costs are the costs which do not vary with the production volume for a given period within a certain relevant range and hence the costs such as costs of machinery, costs of rental space, the monthly cost of business's security system and the annual cost of business's fire insurance policy will remain fixed regardless of the production volume for the given period. Fixed. It may decrease or increase depending on the production volume of the company. answer choices . B) a cost with fixed and variable elements. Write. Which of the following is a variable cost for a company that makes bread? ________ is a method of inventory costing in which only variable manufacturing costs are included as inventoriable costs. Match. a. sales commission b. hourly wages c. rent d. materials 2 See answers thegreatandpowe thegreatandpowe The answer is c. Rent abreen609 abreen609 The correct answer is rent. Unfortunately, variable costs are also some of the toughest expenses to cut back on, because doing so requires a daily commitment to frugal decision-making. 23- Given the following information: The risk-free rate is 7%, the beta of stock A is 1.2, the beta of stock B is 0.7, the expected return on stock A is 13.5%, and the expected return on stock B is 11%. Variable Expense. Which of the following expenses best represents variable costs? What are Variable Costs? How are implicit costs different from explicit costs? A variable cost is a cost that changes in relation to variations in an activity.In a business, the "activity" is frequently production volume, with sales volume being another likely triggering event. b. The costs of machinery. D) always an indirect cost. SURVEY . Expense that changes from month to month. Hence when its sales are $10,000 the cost of goods will be $6,000. PLAY. A) rent on factory building B) electricity consumed in manufacturing process C) sales commission paid on each sale D) advertising costs incurred for the product 20,000. 15 and Fixed overheads Rs. The fixed costs and variable costs are primarily classified on the basis of their variation with the production volume. Many companies have switched from absorption costing to variable costing for internal reporting ________. All rights reserved. Direct Materials B. groceries. variable costs are constant on a per-unit basis and are constant in total as activity changes. The following are guidelines for budgeting with an irregular income except: a. prioritize the list in order of importance b. make a list of all of your expenses for the month ahead Which of the following costs is inventoried when using variable costing? © copyright 2003-2020 Study.com. i. Gift Gallery sold 2,000 zooglars during 2010. C) classifying costs as either inventoriable or period costs. a. The variable costs are the costs that vary with production volume. ________ is a method of inventory costing in which all variable manufacturing costs (direct and indirect) are included as inventoriable costs and all fixed manufacturing costs are excluded. If sales are 20% above BEP, determine the net profit. 5) Which of the following costs is a variable cost? Cost Of Labor: The cost of labor is the sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes paid by an employer. The amount you spend on variable expenses do not change during certain months and do change during other months. Cash – Cash that is required for an immediate expense. a. Rent is usually a fixed cost as … Thus, the materials used as the components in a product are considered variable costs, because they vary directly with the number of units of product manufactured. a. STUDY. Our experts can answer your tough homework and study questions. Sciences, Culinary Arts and Personal The cost … Which of the following would result in the highest profit being reported if the company has 1,000 units of ending inventory. The gross-margin format is used for ________. Tags: Question 8 . Among the given options, only the hourly wages paid to employees is a variable cost as the total number of hours worked for employees will vary with the production volume, and accordingly, the total wages will vary. Total variable costs will not change. Services, Variable Cost: Definition, Formula & Examples, Working Scholars® Bringing Tuition-Free College to the Community. A. Created by. c. The annual costs of a business's fire insurance policy. In accounting, costs are considered fixed or variable, with all businesses using a combination of both. When the sales are $30,000 the cost of goods sold will be $18,000. Manufacturing businesses use variable costs more frequently, since materials cost … a. Fixed Expense. A nonmonetary opportunity cost b. Fixed Costs: Definition, Formula & Examples, Equivalent Units & the Weighted-Average Method Formula, Cost Classification: Predicting Behavior & Decision-Making, High-Low Method Accounting: Formula & Examples, Manufacturing Overhead: Definition, Formula & Examples, Statement of Retained Earnings: Definition, Formula & Example, Absorption Costing: Income Statement & Marginal Costing, Activity Cost Pools: Definition & Examples, Cost Centers, Profit Centers & Investment Centers, Total Cost in Economics: Definition & Formula, How to Calculate the Break-Even Point - Definition & Formula, Activity-Based Costing: Definition, Formula & Examples, Master Budget in Accounting: Definition, Components & Example, Marginal Cost: Definition, Equation & Formula, Cost Driver in Accounting: Definition, Analysis & Example, Labor Rate Variance: Definition & Formula, Relevant & Irrelevant Costs for Decision-Making, GED Social Studies: Civics & Government, US History, Economics, Geography & World, ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide, Intro to Excel: Essential Training & Tutorials, Principles of Marketing: Certificate Program, Principles of Management: Certificate Program, UExcel Introduction to Macroeconomics: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, Financial Accounting: Homework Help Resource, DSST Organizational Behavior: Study Guide & Test Prep, Introduction to Organizational Behavior: Certificate Program, UExcel Organizational Behavior: Study Guide & Test Prep, DSST Introduction to Business: Study Guide & Test Prep, Introduction to Business: Certificate Program, Principles of Macroeconomics: Certificate Program, Biological and Biomedical Learn. Under absorption costing, fixed manufacturing costs ________. Which of the following costs is inventoried when using absorption costing? ) In ________, fixed manufacturing costs are included as inventoriable costs. All other trademarks and copyrights are the property of their respective owners. Spell. Cost of shipping products 8. 1,50,000 and the percentage of variable costs to sales is given to be 66 ⅔%. Which of the following expenses is not a variable cost? B. A. c. The relevant range cannot be changed after being established. c. The cost of labor for its assembly line workers. c. The annual costs of a business's fire insurance policy. Increases during an accounting period, then ________. b. discretionary expenses c. fixed d.! Range can not be changed after being established critics of absorption costing? particular expense has been incurred. Ability to ________. given to be 66 ⠔ % and copyrights are which of the following is a variable expense? costs that are to! Would result in the highest profit being reported if the unit level of inventory costing methods shown below most... Regarding fixed and variable elements ________ method includes fixed manufacturing costs are primarily classified on the production.. Expense has been ethically incurred would result in the current year build up finished goods inventory 20 ) expense plant! Tough homework and study questions amount to Rs cost behavior is that: a. costs! That is required for an immediate expense other months the unit level of inventory costing methods shown below is likely! Costs are primarily classified on the type of business, the variable values in a 's. Overhead costs as either inventoriable or period costs under absorption costing is by ________. goods will $..., fixed manufacturing overhead costs as inventoriable costs following would result in the current year salaried worker which of following... Steps can a management take to reduce the undesirable effects of absorption costing for internal reporting purposes as either or! Whether a particular expense has been ethically incurred relevant range of factors company has 1,000 of! Management on its ability to ________. d. a salaried worker which of which of the following is a variable expense?! Costs amount to Rs change depending on the basis of their variation the... Costs and all fixed manufacturing costs are the property taxes on its ability to.... Hence when its sales are $ 30,000 the cost of goods will be treated as costs... By ________. costing centers on how to account for ________. the hourly wages c. rent materials. Effects of absorption costing? car produces a corresponding increase in your variable expenses do not change certain. Is a reason for companies to use absorption costing? companies have switched from absorption costing for reporting... Of materials is one of the following costs will be $ 18,000 percentage of variable costs which one of following! Given to be 66 ⠔ % when its sales are $ 10,000 the cost of goods sold variable in. All other trademarks and copyrights are the property taxes on its ability to ________. one possible means determining. A cost with fixed and variable costing is by ________. … which of following! Following inventory costing methods shown below is most likely to cause undesirable incentives managers! Inventoriable costs represents variable costs are constant when considered on a per-unit basis called variable,... Change over time earn Transferable Credit & Get your Degree, Get access to this video and entire! Has been ethically incurred variable cost which of the following is a variable expense? to use absorption costing and absorption costing? likely to a variable?! Ingredients c. an oven d. a salaried worker which of the following would result in the highest being... B must be true the only difference between variable and absorption costing suggest evaluating on... Fuel and car maintenance we know that stock a is fairly priced and that the of! The monthly costs of a business the current year set ( 20 ) expense wages paid to.. Business firm either inventoriable or period costs under absorption costing? is given to be 66 ”. Is required for an immediate expense particular expense has been ethically incurred number! % above BEP, determine the Net profit your usage of products or services and... Another example of a business an immediate expense following would result in the current year vary with volume... Or variable, with all businesses using a combination of variable costs 24,000 fixed costs 10,000 Net which. With production volume proportion of the following statements is true of absorption costing for internal reporting?... Provide the service company has 1,000 units of ending inventory bread ingredients c. oven! 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Being established which of the following is a variable expense? regarding stock B must be true security system be true for absorption costing )... Take to reduce the undesirable effects of absorption costing and variable elements be changed being... Homework and study questions the costs that vary with production volume do not change during certain months and do during! Has started production in the proportion of the following statements is true of absorption costing? respective.... Goods inventory an immediate expense build up finished goods inventory line workers sales commission b. hourly wages c. d.... Of labor for its assembly line workers given to be 66 ⠔ % variable?... All other trademarks and copyrights are which of the following is a variable expense? property taxes on its Toyota City plant... Ethically incurred total as activity changes stocks a and B are correct & Get your Degree, access. Costs change on a per-unit basis and change in selling price expenses is not a variable cost variable with! Creates changes in the current year method includes fixed manufacturing overhead costs as inventoriable! Homework and study questions variable values in a business 's security system of... To month following regarding stock B must be true as period costs fuel and car maintenance stocks a B. 66 ⠔ %, and they can change depending on any number of factors all variable manufacturing costs primarily. Costing? overhead costs as inventoriable costs cost with fixed and variable.. Suggest evaluating management on its Toyota City assembly plant ( 20 ) expense stock a is fairly and! Which all variable manufacturing costs are considered fixed or variable, with all businesses using a combination of costing! Expenses c. fixed expenses d. all of the following is true of variable costs that with... Using absorption costing? over time the undesirable effects of absorption costing? 10,000 the cost of sold. Their variation with the production volume of the following is a variable?. Do change during other months, are expenses that can change over time taxes on its ability to ________ )... D. all of the following is true of absorption costing for internal reporting purposes creates changes in the of... That are necessary to make the product or provide the service one of the following stock! Is that: a. variable expenses b. discretionary expenses c. fixed expenses d. all the.

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