Which of the following best defines variable cost?
a. It is the change in cost associated with a unit change in output.
b. It is a cost that changes with changes in the level of the output.
c. It is the set of time-related, overhead expenses of operating a business.
d. It is the set of expenses that cannot be associated with a specific cost object.
Answer: b. It is a cost that changes with changes in the level of the output.