Question

Kohler manufacturing typically achieves one of three production levels in any given year: 8 million pounds of steel, 10 million pounds of steel, or 16 million pounds of steel. in tracking some of its costs, kohler's controller discovered one cost that was $10 per pound at a production level of 8 million pounds, $8 per pound at a production level of 10 million pounds, and $5 per pound at a production level of 16 million pounds. this is an example of a

Answer 1

This is an example of a variable cost. A variable cost is a cost that varies with the level of output. In this case, depending on Kohler's production level, they noticed a difference in the price of the costs associated with production. These costs vary based on the production level and are known as variable costs.