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Variable costs are corporate expenses that vary in direct proportion to the quantity of output. In other words, variable cost is a periodic cost that varies in step with the output or the sales revenue of the company.
Examples:Raw materials, commission, freight outwards, etc..
A variable cost is a corporate expense that varies with production output. Variable costs are those costs that vary depending on a company’s production volume; they rise as production increases and fall as production decreases.Variable costsdiffer fromfixed costssuch asrent, advertising, insurance and office supplies, which tend to remainthe same regardless of production output. Fixed costs and variable costs comprise total cost.
<span style=”box-sizing: border-box; font-weight: bold; color: #555555; font-family: ‘Open Sans’, ‘Helvetica Neue’, Helvetica, Arial, sans-serif; -webkit-tap-highlight-color: rgba(0, 0, 0, 0); -webkit-text-size-adjust: 100%;”>Total Variable Cost = Total Quantity of Output * Variable Cost Per Unit of Output</span>
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