What is meant by variable cost?
Variable costs are company costs that change in proportion to production output. Variable costs go up or down depending on the company's production volume; they rise as production increases and decrease as production declines.
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| Examples of variable costs include the cost of raw materials and packaging. Variable costs can be compared with fixed costs. |
The total costs incurred by any business consist of fixed costs and variable costs. variable cost depends on the production.
Variable production costs are constant amounts per unit produced. When the volume of production and output increases, the variable costs will also increase. Conversely, when fewer products are produced, the variable costs associated with production will decrease.
What are some examples of variable costs?
Examples of variable costs are sales commissions, direct labor costs, costs of raw materials used in production, and utility costs. The total variable cost is simply the amount of output multiplied by the variable cost per unit of output. Variable costs are usually viewed as short-term costs because they can be adjusted quickly.