10 NO. A VARIABLE COST IS A COST THAT VARIES, RING. APPRAISAL COSTS...

2-10 No. A variable cost is a cost that varies,

ring. Appraisal costs are incurred to detect de-

in total, in direct proportion to changes in the

fects before they can create further problems.

level of activity. A variable cost is constant per

Internal and external failure costs are incurred

unit of product. A fixed cost is fixed in total, but

as a result of producing defective units.

will vary inversely on an average per-unit basis

with changes in the level of activity.