variable cost
variable cost
Noun
pl: variable costs
This term is a technical accounting and business concept used to distinguish expenses that fluctuate with production levels from fixed costs, which remain constant regardless of output. It is typically used in formal financial reporting, budgeting, and managerial accounting to determine the break-even point of a business operation.
In professional discourse, it is often contrasted with fixed cost. While a fixed cost might be rent, a variable cost would be raw materials or direct labor. Misusing this term in a general context to mean any "changing price" would be a register error, as it specifically refers to the relationship between cost and production volume.
Meanings
Related Words
fixed costexpenseoverheadmarginal costproductionoutputvolumerevenueprofitmarginbreak even pointbudgetaccountingfinanceeconomicscostingraw materiallaborwagecommissionutilityinventorysupplydemandscaleefficiencyoperating expensecash flowledgerbalance sheetincome statementpricingmarkupdiscountallocationvarianceforecastprojectionexpenditureoutlaydisbursementresourcecapacitythroughputmanufacturingservicewholesaleretaillogisticsshippingpackagingfuelelectricitymaintenancedepreciationamortizationtaxauditequityassetliabilitysolvencyliquidityleveragedividendcapitalinvestmentreturnyieldinflationdeflationmarket sharecompetitive advantageoptimization