Examples of variable costs are salescommissions, direct labor costs, cost of raw materials used in production, and utility costs. Variable costs are usually viewed as short-term costs as they can be adjusted quickly. For example, if a company is having cash flow issues, it may immediately dec...
Is Labor a Fixed Cost? Oh, you wish it was that easy. But labor can be a fixed cost or a variable cost. Fixed costs do not vary in relation to sales. Think business insurance or rent. Variable costs do vary in relation to sales. Think food costs, liquor cost, or COGS. Fixed la...
There are several types of variable costs a business may encounter. Let’s look at some common examples: Raw materials.Used to directly make a product. A company typically spends more on raw materials as production increases. Direct labor.These costs can change based on increased demand or prod...
Indirect labor costs are those related to running a company and selling a product or service versus the actual labor-related costs to make that product or service. Knowing the difference can help you create better financial reports and strategic plans ba
A. January fixed costs: Rent: $1,000 Electricity: $300 Employee salaries: $600 Total January fixed costs: $1,900 B. January variable expenses: Cost of butter, flour, sugar, and milk: $1,500 The total cost of labor: $600 Total January variable costs: $2,100 ...
Labor (when workers are paid per unit completed). The one variable cost you may have difficulty negotiating is direct labor costs. One strategy for reducing those costs is to switch to a payment-per-piece produced, rather than an hourly wage. That way, labor costs are truly tied to product...
Determine whether the following is a variable cost or a fixed cost: Taxes and Licenses. Classify the following cost as either variable, fixed or mixed: Supervisory salaries. Classify the following cost as either variable, fixed or mixed: Direct labor. Distinguish between (...
What is a variable cost? A variable cost is a cost that varies directly with changes in the level of production or sales volume. In other words, it’s a cost that changes in proportion to the level of activity in a business. Some examples of variable costs include direct labor costs, ...
A variable cost is an expense that changes from one instance to the next, like a household's power bill. To calculate variable...
A. A variable cost. B. An indirect cost. C. A conversion cost. D. A prime cost. 正确答案:D 分享到: 答案解析: Answer (D) is correct . Prime costs are direct materials and direct labor. They are directly identifiable elements of production costs and are directly traceable to the ...