Question

Which of the following costs are variable?

Cost	10,000 Units	30,000 Units
1.	$100,000	$300,000
2.	40,000	240,000
3.	90,000	90,000
4.	50,000	150,000

only 1

only 2

1 and 2

1 and 4

Answer 1

Answer :- Option D is correct. ( 1 and 4)

Calculation of Variable cost per unit :-

COST 1:-

Cost per unit at 10,000 units = $100,000 / 10,000 = $10 per unit

Cost per unit at 30,000 units = $300,000 / 30,000 = $10 per unit

COST 2:-

Cost per unit at 10,000 units = $40,000 / 10,000 = $4 per unit

Cost per unit at 30,000 units = $240,000/30,000 = $8 per unit

COST 3:-

Cost per unit at 10,000 units = $90,000 / 10,000 = $9 per unit

Cost per unit at 30,000 units = $90,000 / 30,000 = $3 per unit

COST 4 :-

Cost per unit at 10,000 units = $50,000 / 10,000 = $5 per unit

Coat per unit at 30,000 units = $150,000 / 30,000 = $5 per unit

So according to the above calculations per unit cost for 1 and 4 are remains same on both quantities , so these are Variable.

Variable cost are those cost which can't change according to the quantities, Variable cost per unit will always be same.

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