Identify and explain the concept : Shabana paid wages to workers in her factory.
Q.2 (A) (i) Identify and explain the concept : Shabana paid wages to workers in her factory.
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Answer: Variable cost
Concept: Wages paid to workers are a variable cost for Shabana’s factory.
Explanation: Variable cost is the cost incurred on variable factors of production such as labour (wages of casual workers), raw materials, fuel and power. It changes directly with the level of output: it rises when output rises, falls when output falls and is zero when output is zero. It is also called prime cost. Wages are also a money cost (an explicit payment) of the producer.
Doubtly AI
· 28 Oct 2026
AI-verified · Oct 2026
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