PLTW Computer Integrated Manufacturing (CIM) Practice Exam 2025 – The All-in-One Guide to Achieving Exam Success!

Question: 1 / 400

What type of cost fluctuates in accordance with the level of production or sales revenue?

Fixed Cost

Variable Cost

Variable costs are expenses that change directly in relation to the level of production or sales revenue. As production increases, variable costs rise because they are incurred with each unit manufactured, such as materials needed for production or direct labor costs tied to that manufacturing. Conversely, if production decreases, these costs diminish accordingly.

This behavior makes variable costs essential for businesses in forecasting and budgeting since they allow management to predict how changes in production volumes will impact overall expenses. Understanding variable costs helps businesses make informed decisions regarding pricing, production levels, and cost management to maximize profitability.

Get further explanation with Examzify DeepDiveBeta

Overhead Cost

Sunk Cost

Next Question

Report this question

Download PLTW Computer Integrated Manufacturing (CIM) Practice Exam 2025 – The All-in-One Guide to Achieving Exam Success! PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy