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GCSE Business · key term
A cost that changes with the level of output, such as the cost of raw materials.
Used by AQA, Edexcel and OCR
Paper 1, Paper 2
Revise: Costs, Revenue and Profit CalculationsA variable cost changes with output. Producing more cakes requires more flour, eggs and packaging, so their total cost rises. Producing fewer cakes reduces these costs.
A cost that changes with output, such as the total cost of raw materials used in production.
Check whether a variable cost is given per unit or as a total. Multiply a per-unit cost by output before adding fixed costs.
Distinguish variable cost per unit from total variable costs. Multiply the per-unit figure by output before adding fixed costs.
Use quantity sold for revenue and quantity produced for variable costs. Break-even charts assume that all output is sold.
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A cost that changes with output, such as the total cost of raw materials.
Specification 1.3.2 · Paper 1
A cost that changes directly with output, such as the raw materials used to make products.
Revise: Revenues, Costs, and ProfitsVariable costs change directly with output. Clay used to make pots is a variable cost because making more pots requires more clay. Packaging can also be a variable cost if each product needs its own packaging.
Paper 2
A cost that changes with the level of output, increasing when more is produced and decreasing when less is produced.
Revise: Types of Business CostsVariable costs change with output. Producing more usually requires more materials, so total variable costs rise. Producing less requires fewer materials, so they fall.
A business cost that changes with the level of output, such as the cost of raw materials.
A cost that changes with the level of output, such as the cost of materials used to make products.
A cost that changes with output, such as the total cost of materials used to make products.