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Part $1$

Choose the correct description of variable and fixed costs.

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Part $1$

A$.$

A variable cost changes in total in proportion to changes in the related level of total activity or$$ volume, such as a sales commission that is a percentage of each sales revenue dollar. A fixed cost remains unchanged in total for a given time$$ period, despite wide changes in the related level of total activity or$$ volume, such as a fixed annual leasing cost of a machine.

B$.$

A variable cost is considered to be a unit$$ cost$,$ such as the$$ per$-$attendee$-$cost of hiring a musical group to perform at an event. A fixed cost is considered to be a total$$ cost$,$ such as the total fee paid to the musical group for performing at the event.

C$.$

A variable cost is related to a particular cost object and can be traced to it in an economically feasible$$ way, such as the cost of steel in the manufacturing of a luxury car. A fixed cost is related to a particular cost object but cannot be traced to it in an economically feasible$$ way, such as the salary of a plant manager who oversees production of many different types of luxury cars produced at the same plant.

D$.$

All of the above.