Plaza Corporation observed that when 25,000 units were sold, a particular cost amounted to $70,000, or $2.80 per unit. When volume increased by 15%, the cost totaled $80,500 (i.e., $2.80 per unit). The cost that Plaza is studying can best be described as a:
A. variable cost.
B. fixed cost.
C. semivariable cost.
D. discretionary fixed cost.
E. step-fixed cost.
Answer: A. variable cost.
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