Trading Ideas
What is a Variable Cost?
The amount of money many companies spend is in many ways directly proportionate to how much they produce. That is, there are a lot of variable costs that come with running a company. These costs are periodic and vary depending on the level of output or sales of a company. These costs can include labor, raw material, distribution costs and more. Variable costs correlate with production: the more a company produces, the higher its variable costs.
In most cases, a business’ variable costs are synonymous with its cost of goods sold (COGS). They’re opposite fixed costs and tend to factor …read more […]