To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon

A. units of labour

B. unit of production

C. time horizon

D. units of inventory

Answer: Option C

Solution(By Examveda Team)

To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon time horizon. Time horizon is the length of time over which an investment is made or held before it is liquidated. Time horizons can range from seconds in the case of a day trader, all the way up to decades for a buy-and-hold investor or an individual who is investing in a retirement plan.