Costs that are necessary to the cost of goods sold is the combination of variable cost.
What is variable cost?
Variable cost is a cost that varies with the level of output. This cost either increase or decrease with sales volume changes.
What the above means is that as the cost of production increases, variable cost also increase and vice versa. It is a cost that changes in relation to variations in an activity.
Therefore, costs that are necessary to the cost of goods sold is the combination of variable cost.
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