Consider a bakery in your community. Ingredients such as sugar and butter would be examples of _____ costs.

A) fixed
B) incidental
C) prestige
D) inelastic
E) variable

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

Ingredients

The individual components or substances that are combined to create a final product, especially in food.

Bakery

A place of business where baked goods such as bread, cakes, and pastries are produced and sold.