ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Variable cost is a production expense that increases or decreases depending on changes in a company’s manufacturing activity. For example, the raw materials used as components of a product are variable costs because this type of expense typically fluctuates based on the number of units produced.

Detailed explanation-2: -Variable costs are sometimes called unit-level costs as they vary with the number of units produced.

Detailed explanation-3: -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.

Detailed explanation-4: -A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease depending on a company’s production or sales volume-they rise as production increases and fall as production decreases.

Detailed explanation-5: -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.