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 ?
By changing two assumptions used in elementary models of the firm, from linear to cubic variable cost and parabolic revenue functions, keeping other assumptions intact--single product, short run, and certainty, it was shown that DOL equals zero when the firm's output is optimized, regardless of the level of operating fixed cost.
Variable costs will need to be scrutinized for problems due to freight, while fixed costs due to salary overhead will need continual lowering.
where EVCQ is the elasticity of variable cost with respect to output, EVCK is the elasticity of variable cost with respect to capital, and EVCT = [partial derivative] ln VC/[partial derivative]t.
For example, utility bills are considered to be fixed costs but may vary greatly over a year's time, even more than some variable costs.
To further enhance this analysis, a Monte Carlo simulation may be employed to estimate variable costs.
There are various factors which determine the organization's composition of fixed and variable costs. Few of such factors are the level of business risk, revenue generation and the degree of operating leverage .
Table 4 shows that the average total cost consisting of fixed costs with variable costs incurred by duck breeders laying the lowest nomadic maintenance system of IDR.
Another benefit of my CVP analysis method is that adjusting the breakeven point for charge card and debit card bank fees includes this variable cost with the COGS method.
Standard micro theory shows that the capital stock coefficient is negative when the firm is not in long-mn equilibrium since it shows the reduction in variable cost due to a unit increase in capital.
The survey results show that the average capacity of elderly care facilities is around 400 beds, the fixed cost is about RMB 250000 Yuan per bed (or RMB 100 million Yuan for a facility with 400 beds), and the variable cost for one bed is averagely RMB 1650 Yuan per month (or about RMB 20000 Yuan annually).
* Total Variable Cost: variable cost is the cost of production inputs required for performing the production process.
From these data the values of partial variable cost drivers (VARI) can be derived by an equation to calculate variable costs (V) for monitoring the category of trains on the particular connection.

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