variable cost


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Related to variable cost: Semi variable 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 ?
Complications During peak periods, price will be substantially above the average variable cost of the marginal generating unit To get a more realistic view of the competitive supply curve, number of significant complications should be recognized:
The transfer price should be equal to the variable costs of the goods or services, plus the contribution margin per unit that is lost.
In the first step of the calculation, the profit-improvement algorithm is employed to compute the maximum revenue/variable cost ratio for each of the three railroads assuming the other two railroads set their respective prices at variable cost.
Changes in variable costs resulting from the reform are less dramatic, mainly because of the dominance of wages within total variable costs.
check] $962,000 in variable costs per year from decreased hospital utilization.
But now we allocate it to fixed and variable costs, as well as by coremaking, molding, melting and every other department.
The variable costs for rehabilitation activity average $700 per patient per month.
Total variable cost was approximately $7497 per year, while on a per accession basis, the variable cost was $4.
RELATED ARTICLE: Fixed versus variable cost behavior
First, based on program-specific data on the rates, the variable costs, and the program mix, we can compute the package (aggregate) value as follows:
For a business organization, pretax operating income (Figure 1, line 23) is the excess of tuition revenue over both fixed and variable costs.
To use Hutt's analysis, the break-even point can be determined by calculating your fixed costs (unvarying expenses), variable costs (fluctuating expenses) and your contribution margin (selling price per unit minus variable expenses per unit).

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