Question

which expense is a variable cost?
weekly advertisement picture in a journal
monthly rent on a store
insurance payments
hourly wages for an office employee

Explanation:

To determine a variable cost, we recall that variable costs change with the level of production or activity. Fixed costs remain constant regardless of activity.

• Weekly advertisement in a journal: Usually a fixed cost (same cost weekly, not dependent on output).
• Monthly rent: Fixed (same each month, not related to production).
• Insurance payments: Fixed (premium is constant over the period).
• Hourly wages for an office employee: If the number of hours worked (or the employee’s hours) vary with business activity (e.g., more hours during busy periods), this cost changes. So it is a variable cost as it depends on the number of hours (activity level).

Answer:

D. Hourly wages for an office employee