Total costs in the short-term are classified into fixed costs and variable costs. Which one of the following is a variable cost?

A Cost of raw material
B Cost of equipment
C Interest payment on past borrowing
D Payment of rent on buildings

Correct Answer: Cost of raw material

Total costs in the short-term are classified into fixed costs and variable costs. Cost of raw material is a variable cost. Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output.
Bissoy MCQ
#Commerce #Economics

Related Questions

During the four years that Mr. Rahim owned his car,he found that his total car expenses were Tk. 18,000. Fuel and maintenance costs accounted for 1/3 of the total cost and together these two costs accounted for 1/5 of the total cost. If the only other expenses were taxes and License fees, then the cost of financing was how more of less than the cost of taxes and license fees?
A 300 tk less
B 600
C 500
D 8525
If ‘F’ is the fixed cost, ‘V’ is the variable cost per unit (or total variable costs) and ‘P’ is the selling price of each unit (or total sales value), then break-even point is equal to
A $$\frac{{{\text{F}} \times {\text{V}}}}{{\text{P}}}$$
B $$\frac{{{\text{F}} \times {\text{P}}}}{{\text{V}}}$$
C $$\frac{{\text{F}}}{{1 + \frac{{\text{V}}}{{\text{P}}}}}$$
D $$\frac{{\text{F}}}{{1 - \frac{{\text{V}}}{{\text{P}}}}}$$
Method which divides support department cost into two dimensions such as fixed and variable cost pool is classified as
A sales mix allocation method
B dual-rate cost-allocation method
C single rate cost allocation method
D quantity variance allocation method
Support department cost allocation method which makes no difference between variable and fixed costs is classified as
A sales mix allocation method
B dual-rate cost-allocation method
C single rate cost allocation method
D quantity variance allocation method
The total cost of a bouquet of roses at a flower shop depends on the number of roses ordered. The vase costs $5, and each rose costs $2.25. Which equation can be used to find 'c', the total cost of a bouquet with 'r' roses?
A c = (5 + 2.25)r
B c = 5r + 2.25
C c = 5 + 2.25r
D c = 5 + (5-2.25)r
The total cost of a bouquet of roses at a flower shop depends on the number of roses ordered. The vase costs Tk. 5 and each rose costs Tk. 2.25. Which equation can be used to find c, the total cost of a bouquet with r roses?
A c = (5+2.25)r
B c= 5r+2.25
C c=5+2.25r
D c=5 + (5-2.25)r
For large farms to be as productive as they can be, their owners need to invest heavily in expensive machinery. This typically requires them to go into considerable debt, and interest on this debt is then a significant fixed cost. This high fixed cost makes those farmers vulnerable to operating losses if the price of their products drop.
A They can be highly productive without being profitable.
B They tend to be so highly productive that they drive down market prices.
C They tend to be consistenly profitable if their owners borrow at low interest rates.
D They respond to opearting losses by increasing their productivity.
Rice costs 1/3rd of the cost of fish and fish and fish costs 5/4th of the cost of meat. How many times is the cost of meat as compared to that of rice?
A 5/12
B 4/5
C 5/4
D 5/3
Costs, which consist of interdepartmental cost allocations plus cost of support department are classified as
A complete reciprocal costs
B artificial costs
C operating costs
D flexible operating costs
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B Tk. 45
C TK. 50
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