Difference between revisions of "Variable costs"
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Combined with fixed costs, variable costs make up the total cost of production. | Combined with fixed costs, variable costs make up the total cost of production. | ||
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| + | This needs to be lower than the total income or the company will not make money. | ||
== External links == | == External links == | ||
Revision as of 00:32, July 15, 2014
Variable costs are expenses that vary directly with the size of a firm's output. As output increases over the range of production, the variable costs increase. Variable costs include raw materials, labor, fuel, and wear and tear on equipment. Costs which do not change with the size of a firm's output are fixed costs.
Combined with fixed costs, variable costs make up the total cost of production.
This needs to be lower than the total income or the company will not make money.
External links
- Variable cost BusinessDictionary.com