VARIABLECOST

Variable cost

Variable costs are costs that change in proportion to the good or service that a business produces. Variable costs are also the sum of marginal costs over all units produced. They can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost. Direct Costs, however, are costs that can easily be associated with a particular cost object. However, not all variable costs are direct costs. For example, variable manufacturing overhead costs are variable costs that are indirect costs, not direct costs. Variable costs are sometimes called unit-level costs as they vary with the number of units produced.

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variable cost

Noun

  1. A cost that changes with the change in volume of activity of an organization.
    Variable costs of nuclear-generated electricity seem low.
    Variable costs may actually vary with the number of shifts, the number of set-ups, or many other specific activities.


The above text is a snippet from Wiktionary: variable cost
and as such is available under the Creative Commons Attribution/Share-Alike License.

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