Question

Which of the following refers to the costs of production that fluctuate depending on the number of units​ produced? A. Total cost B. Contribution per unit C. Markup D. Variable cost E. Fixed cost

Answer 1

Variable cost refers to the costs of production that fluctuate depending on the number of units​ produced.

Explanation:

The cost of any product that changes based on the quantity of goods that are produced. The volume that is produced decides the fluctuations in the variable cost. Fixed cost is the cost that will not change based on the number of units of the goods that is produced. Rent of a building can be considered as a fixed cost.

Example for variable cost may be raw materials cost, packaging cost,etc. Variable cost can be calculated by adding up the cost of labor and raw materials that are used in the production of one unit of a good. The total variable cost can be calculated by multiplying   variable cost per unit with the number of units produced.