{"id":1184,"date":"2021-04-27T21:32:03","date_gmt":"2021-04-27T21:32:03","guid":{"rendered":"https:\/\/enorcerna.com\/wiki\/what-is\/variable-costs\/"},"modified":"2021-04-27T21:32:03","modified_gmt":"2021-04-27T21:32:03","slug":"variable-costs","status":"publish","type":"post","link":"https:\/\/enorcerna.com\/wiki\/what-is\/variable-costs\/","title":{"rendered":"Variable costs"},"content":{"rendered":"
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What are variable costs?<\/h2>\n

The variable costs, <\/strong>also known as variable cost,<\/strong> They are those costs that vary according to the production carried out in a company or organization, <\/strong>that is, with the amount of goods or services that are being produced.<\/p>\n

The more an organization produces, the more variable costs it must pay. For example, more product packaging or more raw materials.<\/p>\n

In short, and unlike fixed costs, variable costs vary according to the number of units produced.<\/p>\n

\"Representative<\/p>\n

Representative graph of variable costs.<\/p>\n<\/div>\n

Variable cost characteristics<\/h2>\n

Among the main characteristics of variable costs we can highlight that:<\/p>\n

    \n
  • They are controllable in the short term.<\/strong><\/li>\n
  • They do not depend on time<\/strong> but the volume of units produced.<\/li>\n
  • They are proportional <\/strong>to the activity.<\/li>\n
  • They are controlled and regulated by management<\/b> of the organization.<\/li>\n<\/ul>\n

    Classification of variable costs<\/h2>\n

    Variable costs can be proportional, progressive or regressive. <\/strong><\/p>\n

    Proportional variable cost<\/h3>\n

    Those costs strictly linear to the activity. These vary according to the volume of what is produced.<\/p>\n

      \n
    • Example:<\/strong> materials needed to produce a certain product.<\/li>\n<\/ul>\n

      Progressive variable cost<\/h3>\n

      Those costs that vary in proportion to what is produced.<\/p>\n

        \n
      • Example:<\/strong> workforce; the more they produce, the more hours employees are paid.<\/li>\n<\/ul>\n

        Regressive variable cost<\/h3>\n

        Those inverse costs at the production level. The more production, the less cost.<\/p>\n

          \n
        • Example:<\/strong> purchase of materials in a wholesale way, with a discount for quantity.<\/li>\n<\/ul>\n

          Examples of variable costs<\/h2>\n

          Here are some examples of variable costs:<\/p>\n

            \n
          • Workforce<\/strong>: the more demand there is in a company, the more staff will be needed.<\/li>\n
          • Materials<\/strong>: the more demand for a product there is, the greater amount of raw material will have been needed.<\/li>\n
          • Selective taxes<\/strong>: taxes on luxury items, alcoholic beverages or banking services.<\/li>\n
          • Product packaging<\/strong>: its cost will depend on the amount of product that is sold.<\/li>\n
          • Sales commissions<\/strong>: when the employee's salary depends directly on the amount of sales he makes.<\/li>\n<\/ul>\n<\/div>\n\n\n
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            What are variable costs? The variable costs, also known as variable cost,…<\/p>\n","protected":false},"author":1,"featured_media":1185,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1184","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-what-is"],"_links":{"self":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/1184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/comments?post=1184"}],"version-history":[{"count":0,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/1184\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media\/1185"}],"wp:attachment":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media?parent=1184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/categories?post=1184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/tags?post=1184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}