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Commercial Pilot Licence (CPAER) – Canada · Question

Which of the following is an example of a variable cost for a manufacturing company?

Direct materials are variable costs because their total cost changes in direct proportion to changes in the volume of production. Factory rent, straight-line de

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Question: Which of the following is an example of a variable cost for a manufacturing company?

Answer options:

  • Factory rent.
  • Depreciation of production machinery (straight-line method). ✅ Direct materials.
  • Salaries of administrative staff.

Correct answer: Direct materials.

Explanation: Direct materials are variable costs because their total cost changes in direct proportion to changes in the volume of production. Factory rent, straight-line depreciation, and administrative salaries are typically fixed costs within a relevant range.

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