Variable costs


 

Variable costs are costs which automatically change in relation to the reference value (for example, changing material costs due to changed production quantities). The opposite of variable costs is fixed costs. Defining which costs have to be viewed as variable or fixed depends on the specific situation in which the decision is made and the time frame. In principle, the longer the time frame is, the more variable costs there are. In the long term, all costs may be viewed as variable.

 

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