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Question
The cost which changes as per the levels of production is ______.
Options
Variable cost
Fixed cost
Total cost
Implicit cost
Solution
The cost which changes as per the levels of production is variable cost.
Explanation:
Variable costs are the costs which vary directly in proportion to changes in the volume of output. Cost of direct material and direct labour, power, etc., are examples of variable costs. When the output is double, variable cost will also be double.
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