Chapter 19, Problem 8QS

To determine

Variable Cost:

As clear from its word itself, variable cost is that cost which varies with volume of output. It fluctuates in the same proportion to the good and services produces. Variable cost shows an increasing graph with the rise in production while a decreasing graph during the downfall of production.

Effect on contribution margin under variable costing if the production doubles to 40,000 units while the sale remains same of 20,000 units.