Multiple choice

Increase in beds purchased for hospital, with increase in number of patients in hospital is

  1. variable cost

  2. fixed cost

  3. mixed cost

  4. none of these
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A Correct answer
Explanation

 It is variable cost means since as the number of patients are increasing in the hospital, the number of beds have also to be increased. Variable cost is that which increases with increase in the activity. Increase in the activity is the increase in number of patients and increase in cost is due to increase in number of beds purchased.  

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