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How is the average variable cost related to the variable cost?

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How is the average variable cost related to the variable cost?

Cost Analysis

The 'cost' of production refers to the cost incurred by a firm in the production of commodities and services. The 'fixed cost' of production is inevitable and independent of the 'quantity of output'. It includes the property rent of firm, wages of the employees, loan repayments, bills. The 'variable cost' of production depends on the quantity of output produced which includes the cost of raw materials,

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Theoretically speaking, the 'average variable cost' gives the 'variable cost' of per unit of output that a firm incurs in the production process. The...

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Variable Costing: Method, Formula & Advantages

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Chapter 13 / Lesson 5
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Variable costing assigns the cost of materials and supplies as needed in the production process. Learn about this method in accounting, understand the formula for determining variable cost, and explore its advantages and some examples.


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