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Costs that change in direct proportion to the number of units produced or the amount of services provided are known as 'variable costs. Variable costs
Costs that change in direct proportion to the number of units produced or the amount of services provided are known as 'variable costs." Variable costs are directly tied to cost drivers and generally take the form of another direct labor or direct materials. A manufacturing company makes widgets with direct materials cost in the amount of $5 per unit. Because all production is done by robots, there are no labor costs directly associated with the production of widgets. To illustrate, assume that the manager wants to know total variable cost if 4 50 units were produced: Variable Cost per Unit x Units Produced Total Variable Cost Calculate total direct materials cost at different levels along the relevant range of 100-500 units Variable cost per unity Select with the cost driver across the relevant range. Total variable cost with the cost driver across the relevant range Based on the completed table above, select the graph that correctly represents the data
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