Which of the following are examples of variable costs?

Which of the following are examples of variable costs?

Building and site rent

Annual insurance premium

Raw materials expenditure

Delivery costs for materials
A . 1 and 3
B . 2 and 3
C . 1 and 4
D . 3 and 4

View Answer

Answer: D

Explanation:

Raw materials expenditure (3) and delivery costs for materials (4) are variable costs as they fluctuate with production levels. Variable costs vary directly with the volume of production, unlike fixed costs such as rent or insurance, in line with CIPS’s classifications of cost types in procurement.