Variable cost

The variable costs, or mutable, flexible, volume-related costs in the operational cost accounting is that part of the total cost, which is a change in the considered reference (usually level of employment) also changes.

Costs, which - unlike the variable costs - of the output quantity are independent, are called fixed costs. In contrast to the fixed costs, the variable costs can be causation distribute the product units to determine the unit cost (though one distinguishes fixed and variable costs). The proportion of variable and fixed costs is calculated by cost resolution.

Costs, although they vary with changing employment also, but does not behave along one of the courses listed below costs (eg maintenance costs, energy costs, depreciation and amortization), as mixed costs ( semi-variable costs) are referred to.

Assumptions

What costs should be considered variable or fixed, depending on:

The length of the horizon observation variability increases; long run all costs can be viewed as a variable.

Examples

Variable costs are, for example, costs for raw materials and supplies that go into a product, but also labor or freight costs.

The four most common types of costs in variable costs are: material, merchandise, commissions and external services.

Cost trends

The course of the variable cost function can be proportional, regressive, progressive or, in rare cases, be regressive.

• Proportional (linear ): The total variable costs change in the same ratio as the reference quantity. The variable costs remain - regardless of the application rate - constant and identical to the marginal cost.

• Sliding scale ( below average ): The total variable costs increase more slowly with increasing employment. Reduce the variable costs thus with increasing application rate ( eg, due to discounts granted at a high amount of decrease).

• Progressive ( disproportionate ): The total variable costs increase more strongly with increasing employment. The variable unit costs increase while (for example, due to overtime).

• Regressive: The total variable cost and average variable cost increases with increasing employment from (eg heating costs in conference rooms with a rising number of visitors ).

In business practice, is usually assumed to be proportional over the variable costs.