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Ingredients for a pizza cost $3. What happens to that variable cost as the number of pizzas sold rises from 200 to 800?

ACost per pizza stays at $3 and the total rises
BCost per pizza falls and the total stays fixed
CCost per pizza rises and the total also rises
DCost per pizza stays at $3 and the total falls
Answer & Solution
Correct answer: A. Cost per pizza stays at $3 and the total rises
1. A variable cost is incurred once for every unit sold, so the per unit amount does not move with volume. 2. At 200 pizzas the total variable cost is 200 times $3, which is $600. 3. At 800 pizzas the total variable cost is 800 times $3, which is $2,400. 4. The rate stays at $3 while the total rises, which is the defining behaviour of a variable cost. _Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 5.1 Introduction_
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