Asked by Redwanul Haque on Jul 08, 2024
Verified
________ is (are) most likely a variable cost for a firm.
A) The monthly lease payment on a delivery truck that is leased for three years
B) The plumbing company's annual licensing fee
C) The quarterly payments for a two-year maintenance contract for copy machines
D) Monthly health insurance expenses for employees
Variable Cost
Costs that are directly influenced by the scale of manufacturing.
Monthly Lease
A contract outlining the rental agreement for a property on a month-to-month basis.
Health Insurance
Health Insurance is a type of insurance coverage that typically pays for medical, surgical, prescription drug, and sometimes dental expenses incurred by the insured.
- Assess the relationship between changes in production levels and their influence on fixed, variable, and marginal costs.
Verified Answer
MV
Marlitza VictorJul 13, 2024
Final Answer :
D
Explanation :
Variable costs change with the level of production or business activity. Monthly health insurance expenses for employees can vary with the number of employees, which can change with the level of business activity, making it a variable cost. Choices A, B, and C represent fixed costs, as they do not change with the level of production or business activity.
Learning Objectives
- Assess the relationship between changes in production levels and their influence on fixed, variable, and marginal costs.