Which of the following is the best example of a variable cost?
A. property taxes
B. lease payments for equipment rental
C. rent on office space
D. wages for hourly workers
E. interest on outstanding loans
The answer is clearly D. Temperary workers are variable cost.
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June 26, 2009
Horaayy..there are 2 comment(s) for me so far ;)
D. Wages can be easily varied based on the need… Think about your basic minimum wage job where you can be sent home if you are not busy. You can vary it with your current demand. All the other ones you have no way of adjusting easily.
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The answer is clearly D. Temperary workers are variable cost.
References :