Multiple Choice
Which of the following is NOT a characteristic of an element that makes a good currency?
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1. Introduction to Accounting
Types of Accounting
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Which of the following is considered a variable expense in accounting?
A
Factory rent
B
Direct materials used in production
C
Depreciation on office equipment
D
Salaries of administrative staff
Verified step by step guidance1
Understand the concept of variable expenses: Variable expenses are costs that change in proportion to the level of production or business activity. They vary directly with the volume of goods or services produced.
Analyze each option provided in the question: Factory rent, Direct materials used in production, Depreciation on office equipment, and Salaries of administrative staff.
Determine whether each expense is fixed or variable: Fixed expenses remain constant regardless of production levels (e.g., factory rent, depreciation, and administrative salaries). Variable expenses fluctuate with production levels (e.g., direct materials used in production).
Focus on direct materials used in production: These are considered variable expenses because the amount of materials used increases or decreases based on the number of units produced.
Conclude that direct materials used in production is the correct answer, as it aligns with the definition of a variable expense in accounting.
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