What is variable costs?



Variable cost is the cost which, in aggregate, tend to vary in direct proportion to changes in volume of output or turnover.
definition of variable cost
Variable costs are of two types:

  • Linear variable cost or engineered cost. this is one in which relationship between variable cost and output can be shown as straight line in the graph.
  • Non linear or curve linear variable cost. this occur when the relationship between variable cost and output can be shown as curved line on the graph.

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