Which of the following are examples of variable costs?
Building and site rent
Annual insurance premium
Raw materials expenditure
Delivery costs for materials
A . 1 and 3
B . 2 and 3
C . 1 and 4
D . 3 and 4
Answer: D
Explanation:
Raw materials expenditure (3) and delivery costs for materials (4) are variable costs as they fluctuate with production levels. Variable costs vary directly with the volume of production, unlike fixed costs such as rent or insurance, in line with CIPS’s classifications of cost types in procurement.
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