Question

Are costs that are incurred for every unit of volume. Total variable costs change in direct proportion to changes in volume.

Answer 1

Variable cost increases for each new unit of volume produced. Hence as new products are produced the variable cost increases.

Step-by-step explanation:

Unlike the fixed cost which is constant, e.g land; the variable cost changes and are not constant for each new unit of volume. Examples of variable cost includes, sales commission cost. We also have the mixed cost, which is a combination of fixed cost and variable cost.