ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Variable cost (VC) changes according to the quantity of a good or service being produced. It includes inputs like labor and raw materials. Variable costs are also the sum of marginal costs over all of the units produced (referred to as normal costs).

Detailed explanation-2: -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.

Detailed explanation-3: -There are a number of different types of costs of production that you should be aware of: fixed costs, variable costs, total cost, average cost, and marginal cost.

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: -The total price paid for the resources used to manufacture a product or create a service, such as raw materials, labour, and others, is called the production cost.