A cost that is tied to the amount produced is known as which of the following?

A cost that is tied to the amount produced is known as a variable cost. Variable costs change in direct proportion to the level of production. This means that as production increases, variable costs also increase, and as production decreases, these costs drop correspondingly. Common examples of variable costs include expenses such as raw materials, labor directly involved in production, and utilities required for manufacturing operations.

Understanding variable costs is essential for businesses as they impact pricing decisions, budgeting, and financial forecasting. By accurately calculating variable costs, a firm can determine the minimum price it needs to charge to cover its production expenses at different levels of output.

In contrast, fixed costs remain constant regardless of the level of production. These include expenses such as rent, salaries of permanent staff, and insurance. Static cost is not a commonly used term in this context, and regressive cost typically refers to a tax or expenditure that decreases as income increases, which is unrelated to production costs.