variable cost

(redirected from Total variable cost)
Also found in: Dictionary, Acronyms.
Related to Total variable cost: Total fixed cost

Variable cost

A cost that is directly proportional to the volume of output produced. When production is zero, the variable cost is equal to zero.

Variable Cost

A cost to a person or business that varies over time according to a number of factors. For example, a dental office must buy dental supplies, which usually cost about the same. This is a fixed cost. On the other hand, the dental office must also pay the electric and gas and water bills, which may fluctuate considerably. This is a variable cost.

variable cost

The costs of production that vary directly in proportion to the number of units produced. Variable costs often include labor expenses and raw material costs, because labor and raw material usually must be increased to increase output. Firms for which variable costs represent a high proportion of total costs are usually less likely to experience large fluctuations in earnings, because changes in sales and revenues are accompanied by nearly equal changes in costs. Compare fixed cost.
References in periodicals archive ?
Total variable cost comprised cost of material inputs, energy inputs and other expenditure.
As indicated in Table 2, total variable costs grew by slightly more than 12 percent annually before the introduction of prospective payment.
That percentage is multiplied by the total variable costs for the MSO.
The laboratory supervisor has determined that the total fixed costs for this test system are $300 and the total variable costs are $1 per test.
Changes in variable costs resulting from the reform are less dramatic, mainly because of the dominance of wages within total variable costs.
1 GINGER LAKE CAMP 2 BUDGET ANALYSIS PRIOR BUDGETED 3 YEAR AMOUNT 4 NUMBER OF CAMPERS 100 100 5 6 TUITION REVENUE $350,000 $370,000 7 8 FIXED COSTS 9 Rent or depreciation & property tax 75,000 80,000 10 Staff salaries 65,000 70,000 11 Office expense & promotion 20,000 25,000 12 Fixed program costs 12,000 15,000 13 Other fixed costs 25,000 25,000 14 TOTAL FIXED COSTS 197,000 215,000 15 16 VARIABLE COSTS 17 Food 36,000 37,000 18 Counselors' salaries 45,000 50,000 19 Insurance premiums - variable 16,000 17,000 20 Supplies 15,000 16,000 21 Other variable costs 8,000 10,000 22 TOTAL VARIABLE COSTS 120,000 130,000 23 PRETAX OPERATING INCOME $ 33,000 $ 25,000 24 CAMPER CONTRIBUTION $ 2,300 $ 2,400 25 CAMPERS TO BREAK EVEN 86 90
Owner's return $100,000 Entrepreneurial overhead $200,000 Fixed costs Appraisal library $ 15,000 Office rent $ 30,000 Total fixed costs $ 45,000 Variable costs Telephones $ 7,000 Utilities $ 10,000 Supplies $ 2,000 Auto reimbursement $ 4,000 Miscellaneous $ 500 Total variable costs $ 23,500 Labor costs Secretary $ 30,000 Part-time market researcher $ 15,000 Appraiser 1 $ 60,000 Appraiser 2 $ 60,000 Appraiser 3 $ 60,000 Benefits $ 30,000 Total labor costs $255,000 Total costs $523,500 Number of appraisers 3 Cost per desk (breakeven) $174,500 Number of workable hours in a year 2,000 Breakeven cost per hour $ 87.
Vegetable farming is labor intensive, and labor accounted for 43 percent--the largest share--of total variable costs on large vegetable farms in 1990," Jinkins says.
Total variable costs accordingly went up about 2 1/2 per cent.