Question

The two components of ____ are variable costs and fixed costs

A. Entire cost
B. Total cost
C. Complete cost
D. Required cost

Answer 1

The two components of total cost are variable costs and fixed costs. Correct answer: B

Variable costs or expenses are expenses that change as conditions change. They increase or decrease depending on a company's production volume (they rise as production increases and fall as production decreases). Fixed costs on the other hand are e xpenses that do not change and remain the same regardless of an increase or decrease in the number of goods or services sold or produced.