Variable costing is a cost accounting method for calculating production expenses where only variable costs are included in the product cost. The formula of variable costing only considers …

Variable Cost is output-dependent and subject to fluctuations based on the production output, or volume, in the current period.

Video Explanation of Costs Watch this short video to quickly understand the main concepts covered in this guide, including what variable costs are, the common types of variable costs, …

A variable cost is an expense that changes in proportion to increases and decreases in production or sales volume.

To calculate the variable cost per unit, divide total variable costs by the number of units produced. For example, if total variable costs are $50,000 for 10,000 units, the variable cost per unit is …

The formula for total variable cost can be derived by adding direct labor cost, cost of raw material and variable manufacturing overhead. Mathematically, it is represented as,

The total variable cost formula can then be described as the total quantity of output times the variable cost per unit of output. Be careful that you don’t mix up variable cost with variable …