Explain variable cost as opposed to fixed cost?

Answer 1

A fixed cost is one that will not change in total due to changes in production volume. An example would be factory rent. No matter how many widgets are produced in that factory, total rent is going to be the same. However, this means that the "per unit" cost changes based on how many widgets are produced. Variable costs, on the other hand, have a fixed per unit price, but total costs change in response to a change in volume. For example, let's say each widget requires $10 of direct labor to produce. Total variable costs is going to change based on how many widgets are produced.

Answer 2

If any expense varies as changes in number of units produced then expense is called variable expense.

If any expense has no impact of changing in the quantity of units produced then that expense is called fixed expense.

Answer 3

one will never change (fixed) one can/will change (variable)

Answer 4

Variable costs are different in this sense that fixed cost remains fixed and it has no impact of change in production level while variable cost changes with the change in production level.

Answer 5

Variable cost is cost which varies with the change in volume of production while fixed cost remains fixed and has no impact of volume of production changed.