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Which of the following is the best example of a variable cost?
Suggested Answer: B
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The net initial investment for a capital project consists of three components: the purchase of new equipment, the increase in working capital, and the after-tax proceeds from the disposal of old equipment For this company, the first of these is $54,000 ($50,000 + $4,000), and the second is $1,000. The calculation of the after-tax proceeds from the disposal of the old equipment is as follows:
38 comments · newest first
XU
Xuan
11 months ago
Yeah, raw materials change with output, makes sense!
GA
Gaston
11 months ago
Wait, property taxes are fixed, right? How are they variable?
JO
Joesph
12 months ago
Not sure about that, interest charges can vary too.
CO
Coleen
12 months ago
I agree, raw materials fluctuate with production levels.
AN
Antonio
12 months ago
Cost of raw material is definitely a variable cost.
NO
Novella
1 year ago
Yeah, raw materials definitely seem to fit the definition of variable costs based on what we studied.
YO
Yolande
1 year ago
I'm not entirely sure, but I feel like property taxes are usually fixed too.
GU
Gussie
1 year ago
I remember practicing a similar question, and I think interest charges are fixed costs, right?
KA
Karan
1 year ago
I think variable costs are those that change with production levels, so I’m leaning towards raw materials.
CA
Carin
1 year ago
Okay, I've got this. The key is that the VM environment provides strong isolation, so the user's access to data files would need to be audited at the host level, not the guest OS level. The answer is A, Host VM monitor audit logs.
DO
Dottie
1 year ago
I'm not too sure about this one. The IEEE standard is mentioned, but the question is asking about the ISTQB Syllabus. I'll need to review my notes on defect reporting to make sure I understand the key requirements.
LE
Leota
1 year ago
Hmm, I'm a bit confused on this one. I know Ethereum is a blockchain platform, but I'm not sure about the specifics of its virtual machine. I'll have to think this through carefully.
ER
Erick
1 year ago
I remember learning about DRM in class, but I'm drawing a blank on the details right now. I'll have to carefully read through the choices and try to eliminate the incorrect ones.
JO
Jordan
1 year ago
Let's see, variable costs are those that vary with the level of output. I'd say B) Cost of raw material is the most fitting example here. Not a hard question, really.
CE
Celeste
1 year ago
I think we can all agree that raw material cost is the best example of a variable cost.
AL
Alfreda
1 year ago
Yeah, that makes sense. It's a clear example of a variable cost.
AM
Amber
1 year ago
I agree, the cost of raw material definitely varies with the level of output.
EV
Eve
1 year ago
Hmm, the president's salary as a variable cost? That's like saying the CEO has to take a pay cut every time production goes down. I'll go with B.
TY
Ty
1 year ago
Hmm, the president's salary as a variable cost? That's like saying the CEO has to take a pay cut every time production goes down. I'll go with B.
CO
Corinne
1 year ago
D) Property taxes.
TR
Tracie
1 year ago
C) Interest charges.
RA
Rasheeda
1 year ago
B) Cost of raw material.
BL
Blythe
1 year ago
A) The corporate president's salary.
CA
Carin
1 year ago
German: So, we all agree that B) Cost of raw material is the best example of a variable cost.
AP
Apolonia
1 year ago
User 3: Definitely, raw material costs fluctuate depending on production needs.
GE
German
1 year ago
User 2: I think raw material costs are a better example of a variable cost.
KI
Kimberlie
1 year ago
User 1: I agree, the president's salary doesn't change based on production levels.
DE
Denise
1 year ago
B) Cost of raw material is the correct answer. Variable costs change depending on the output, while fixed costs like interest charges and property taxes remain the same.
RO
Ronald
1 year ago
But what about A) The corporate president's salary? It can also change based on performance.
NA
Nana
1 year ago
I agree with Floyd, raw material cost can vary based on production levels.
RA
Raymon
2 years ago
The cost of raw material is definitely the best example of a variable cost. It fluctuates with the level of production, unlike the president's salary or property taxes.
XE
Xenia
1 year ago
Variable costs are important to consider when analyzing the financial health of a business.
JA
James
1 year ago
The president's salary is also a fixed cost, unlike raw material costs.
BE
Bea
1 year ago
Interest charges and property taxes are fixed costs that do not change with production.
SA
Sabra
1 year ago
I agree, the cost of raw material is directly tied to production levels.
DO
Dorothy
1 year ago
Yes, raw material costs can change based on production levels, making it a clear example of a variable cost.
PA
Pamella
1 year ago
I agree, the cost of raw material is definitely a variable cost.
FL
Floyd
2 years ago
B) Cost of raw material is the best example of a variable cost.