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Variable costs

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Messages: 1 - 2 of 2
  • Message 1. 

    Posted by Uroosak1 (U15565720) on Monday, 7th January 2013

    I don't understand how to work these out they always come up in business exams in tables asking what the variable costs for the month are if someone could explain to me in detail thank you


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  • Message 2

    , in reply to message 1.

    Posted by whatchamacallit (U15274737) on Wednesday, 9th January 2013

    I don't understand how to work these out they always come up in business exams in tables asking what the variable costs for the month are if someone could explain to me in detail thank you


     
    Hello there Uroosak1,
    In responce to your question, variable costs are those which change when output changes. These tend to be directly related to the production or sale of the product.
    An example of this could possibly be 'raw materials'.
    If you wish to work out the total variable cost of a business, it could be worked out by using this formula: (Variable cost per unit * output)

    I hope this answered your question, and I hope you have a nice day smiley - smiley

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