BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Variable Cost Formula. To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.

Detailed explanation-2: -The total variable cost of a company’s production is equivalent to the total of how much it costs to produce one single unit of product. This number can be determined by multiplying how much it costs to produce one unit by how many products are produced in total.

Detailed explanation-3: -2 (a) The unit product cost under variable costing can be determined by subtracting the fixed factory overhead rate per unit from the unit product cost under absorption costing.

Detailed explanation-4: -Variable costs are costs that change as the volume changes. Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees. In some accounting statements, the Variable costs of production are called the “Cost of Goods Sold.”

Detailed explanation-5: -A variable cost is an expense that changes in proportion to production output or sales. When production or sales increase, variable costs increase; when production or sales decrease, variable costs decrease.