Discussion
What are costs which vary with output called?
Answer: A
Correct answer: prime costs
Prime cost is direct material plus direct labour plus direct expenses - the costs traceable to each unit produced, and therefore the costs that rise and fall with output.
Overheads are the indirect costs, and the greater part of them - rent, insurance, supervision, depreciation - is incurred whether or not anything is produced, so they behave as fixed costs in the short run. "Indirect costs" is simply another name for overheads and fails for the same reason. Since the first two options are not variable costs, "all of the above" cannot hold either.
No comment is present. Be the first to comment.
Loading…
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development