Variable Cost: Definition and Formula

variable cost  Examples of variable costs · Production Supplies Production supplies, such as machinery oil, are consumed based on the amount of machinery Variable cost refers to the cost incurred in various business operations which aren't fixed and may change depending upon the change in volume of production It

Variable costs are costs that vary based on the volume of products you're selling Essentially, the variable cost of a product is the ratio of sales versus to Fixed and variable costs impact the business in different ways but both are important in making the business profitable In the discussion of costs, it will be

If sales or production fall, then those costs can also fall The easiest way to determine if a cost is variable, therefore, is to work out if While fixed costs remain the same, variable costs rise and fall depending on how much you produce As a rule, the more units you make, the higher they are If