ECONOMICS

Detailed explanation-1: -The variable cost of production is a constant amount per unit produced. As the volume of production and output increases, variable costs will also increase. Conversely, when fewer products are produced, the variable costs associated with production will consequently decrease.

Detailed explanation-2: -Unlike fixed costs, variable costs change from month to month. Variable costs fluctuate because they are affected by sales. Your variable costs increase when sales are high and decrease when sales are low.

Detailed explanation-3: -Variable costs are the costs that fluctuate in direct proportion to changes in production volume. For example, if a company produces 100 gadgets, it will incur variable costs for the materials and labor needed to create those gadgets. If the company produces 200 gadgets, it will incur twice as many variable costs.

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: -Variable costs change based on the amount of output produced.