Quick Answer: What Are Variable Costs Also Known As?

Which is variable cost?

A variable cost is a corporate expense that changes in proportion to production output.

Variable costs increase or decrease depending on a company’s production volume; they rise as production increases and fall as production decreases.

A variable cost can be contrasted with a fixed cost..

What is included in variable costs?

Variable costs vary based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.

What is variable cost per unit?

Definition: Variable cost per unit is the production cost for each unit produced that is affected by changes in a firm’s output or activity level. Unlike fixed costs, these costs vary when production levels increase or decrease.

What is a concept variable?

A conceptual variable is the idea of what needs to be measured.

Is overhead a variable cost?

In accounting, variable costs are costs that vary with production volume or business activity. Fixed costs include various indirect costs and fixed manufacturing overhead costs. … Variable costs include direct labor, direct materials, and variable overhead.

What are direct variable costs?

Direct costs and variable costs are similar in nature and are both types of costs involved in production. Direct costs are expenses that can be directly traced to a product, while variable costs vary with the level of production output.

What is another word for variable?

SYNONYMS FOR variable 3 vacillating, wavering, fluctuating, unsteady, mercurial.

What is fixed cost example?

Examples of fixed costs include rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.

What is another word for variable in math?

alterable, changeable, fluid, inconstant, mutable, uncertain, unsettled, unstable, unsteady, variant.

Is clothing a variable expense?

Examples of Household Variable Expenses Typical household variable expenses might include: … General expenses such as clothing, groceries, and car maintenance. Resource expenses such as fuel, electricity, gas, and water.

How is total cost calculated?

The formula for calculating average total cost is:(Total fixed costs + total variable costs) / number of units produced = average total cost.(Total fixed costs + total variable costs)New cost – old cost = change in cost.New quantity – old quantity = change in quantity.More items…•

What is another name of fixed cost?

In Economics, fixed costs, indirect costs or overheads are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such as interest or rents being paid per month, and are often referred to as overhead costs.

What is fixed cost formula?

The formula for fixed cost can be derived by first multiplying the variable cost of production per unit and the number of units produced and then subtract the result from the total cost of production. Mathematically, it is represented as, Fixed Cost = Total Cost of Production – Variable Cost Per Unit * No.

What is fixed cost and variable cost with example?

Examples. Fixed Costs. Depreciation, interest paid on capital, rent, salary, property taxes, insurance premium, etc. Variable Costs. Commission on sales, credit card fees, wages of part-time staff, etc.

Is rent a variable cost?

Variable & Fixed Cost Fixed costs often include rent, buildings, machinery, etc. Variable costs are costs that vary with output. Generally variable costs increase at a constant rate relative to labor and capital. Variable costs may include wages, utilities, materials used in production, etc.

What is the root word of variable?

-var-, root. -var- comes from Latin, where it has the meaning “change. ” This meaning is found in such words as: invariable, variable, variance, variant, variation, varied, variety, various, vary.

What is a variable with example?

more … A symbol for a value we don’t know yet. It is usually a letter like x or y. Example: in x + 2 = 6, x is the variable. Why “variable” when it may have just one value?

What is the other name for variable cost?

Variable costs are sometimes called unit-level costs as they vary with the number of units produced. Direct labor and overhead are often called conversion cost, while direct material and direct labor are often referred to as prime cost. In marketing, it is necessary to know how costs divide between variable and fixed.

What is fixed cost with diagram?

Fixed Costs or Supplementary Costs: The cost that remains fixed at any level of output is known as the fixed cost. These costs must be paid whether there is production or not. These costs include, depreciation allowance, interest on fixed capital, license fee, salaries to permanent staff etc.

How do you find variable cost if not given?

Calculate total variable cost by multiplying the cost to make one unit of your product by the number of products you’ve developed. For example, if it costs $60 to make one unit of your product, and you’ve made 20 units, your total variable cost is $60 x 20, or $1,200.

What are 3 types of variables?

A variable is any factor, trait, or condition that can exist in differing amounts or types. An experiment usually has three kinds of variables: independent, dependent, and controlled.