Cost of raw material
Cost of equipment
Interest payment on past borrowing
Payment of rent on buildings
✅ The correct answer is A.
Total costs in the short-term are classified into fixed costs and variable costs. Cost of raw material is a variable cost. Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output.
Total costs in the short-term are classified into fixed costs and variable costs. Cost of raw material is a variable cost. Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output.