Answer:
A) will not change proportionately with changes in production volumes
Explanation:
Variable costs are the expenses that vary as the production level increase or decrease. Usually, an increase in output leads to a proportionate rise in variable costs in a period. An example of variable cost is raw materials. Variable costs increase proportionally with output up to the optimal level.
Beyond the optimal or the normal range, variable costs tend to rise at a higher rate than the output level. The concept of diminishing marginal returns takes effect. As output increases beyond the normal range, variable cost rise at an increasing rate making the gains from the increased production decline.
