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Which of the following costs is an example of a variable cost? A Advertising B Interest C Packaging D Rent - AQA - GCSE Business - Question 2 - 2023 - Paper 1
Question 2
Which of the following costs is an example of a variable cost? A Advertising B Interest C Packaging D Rent
Worked Solution & Example Answer:Which of the following costs is an example of a variable cost? A Advertising B Interest C Packaging D Rent - AQA - GCSE Business - Question 2 - 2023 - Paper 1
Step 1
Identify the cost types
Answer
To identify which of the given costs is a variable cost, we need to understand the difference between fixed and variable costs.
- Fixed costs: These costs do not change with the level of production or sales. Examples include rent and interest payments.
- Variable costs: These costs fluctuate with production levels. Examples include materials, labor (in manufacturing), and packaging.
Step 2
Analyze the options
Answer
Now, let's analyze the provided options:
- A Advertising: Generally considered a fixed cost, but it can vary based on strategy.
- B Interest: A fixed cost, as it does not change with production.
- C Packaging: This can vary depending on how much is produced; thus, it is a variable cost.
- D Rent: A fixed cost, as it remains constant regardless of production levels.
Step 3