variable cost

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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.
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Turning now to another matter, in the special case of a firm operating at its shut-down point, the optimal mark-up/mark-down, respectively, will result in the firm being just able to cover its Total Variable Cost (TVC); a graphical description of these similar situations is offered in Figures 1a and 1b.
On average, per acre total variable cost for small, medium and large farmers was Rs.
Studying the production costs of intercropped tomatoes and wheat indicates that total variable cost at the level of Fayoum Governorate amounted to LE 9203, of which harvesting cost represents 38.8%, followed by seed cost (15.1%), labor cost (14.3%), and finally chemical fertilizers' cost (11.3%).
Budgetary analysis for adopters and non-adopters Item Non-users Organic Inorganic fertilizer fertilizer (A) Gross revenue(N) 49400.89 69996.3 88360.1 Variable cost(N) Fertilizer 0 510.2 1150.7 See d 739.44 800.6 870.5 Labour 5855.3 7100.4 6770.1 Other expenses 1482 3333 2112 (B) Total variable cost 8076.74 11744.2 10903.3 Fixed cost(N) Rent on land 1200 1500 1400 Depreciation on equipment 1994.5 2450 3100 (C) Total fixed cost 3194.5 3950 4500 (D) Total cost(N) 11271.24 15694.2 15403.3 (E) Gross margin (A-B) in N 41324.15 56022.1 77456.8 (F) Net income (A-D) in N 38129.65 52072.1 72956.8 (G) BCR(A/D) 4.38 4.5 5.7 (H) ROR(F/D) 3.4 3.3 4.7 Source: Field survey, 2012.
Glazner of the Colorado School of Public Health, Aurora, and her colleagues found that the total variable cost per vaccination averaged $11.51; for two vaccinations, more than one-third of health plans paid physicians less than the combined variable cost of $23.02.
Evidence comes from estimating a multiple output total variable cost function that disaggregates total cost into inpatient and outpatient costs, and a comparison of the ratio of these cost components to the ratio of inpatient and outpatient revenues.
The solutions are as follows: 1 Standard variable cost per passenger [pounds sterling] Cleaning 6 [pounds sterling] per hour x (4 minutes / 60 minutes) 0.40 Champagne 9.00 Deckchair hire 0.60 Total variable cost 10.00 Contribution per passenger 25 [pounds sterling] - 10 [pounds sterling] = 15 [pounds sterling] Fixed costs [pounds sterling] Coach hire 175 Parking 20 Total fixed cost 195 Forecast profit (18 x 15 [pounds sterling]) - 195 [pounds sterling] = 75 [pounds sterling] Break-even point = fixed costs / contribution per head = 195 [pounds sterling] / 15 [pounds sterling] per head = 13 passengers Margin of safety = forecast passengers--break-even point = 18-13 = 5 passengers