ECONOMICS

Detailed explanation-1: -Variable costs change based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.

Detailed explanation-2: -Variable costs are expenses that vary in proportion to the volume of goods or services that a business produces. In other words, they are costs that vary depending on the volume of activity. The costs increase as the volume of activities increases and decrease as the volume of activities decreases.

Detailed explanation-3: -Variable costs are costs that do change when the firm alters the quantity of output produced. From a firm’s total cost, two related measures of cost are derived.

Detailed explanation-4: -Variable costs change in proportion to the quantity of output. As production quantity increases, the cost increases; as production quantity decreases, so do the costs. Most accounting textbooks depict variable costs as varying directly with volume.

Detailed explanation-5: -Variable costs are the costs that change in total each time an additional unit is produced or sold.