How do I find the "actual variable costs" in a list of transactions? It would be direct labor, direct material, variable manufacturing overhead, variable selling expense, and variable administrative expense, but what does that look like in a list of transactions for a business. How do I identify those costs?
How do I find the "actual variable costs" in a list of transactions? It would be direct labor, direct material, variable manufacturing overhead, variable selling expense, and variable administrative expense, but what does that look like in a list of transactions for a business. How do I identify those costs?
Chapter1: Financial Statements And Business Decisions
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How do I find the "actual variable costs" in a list of transactions? It would be direct labor, direct material, variable manufacturing
Expert Solution
Step 1: Meaning of variable costs
Cost is the expense incurred in the acquisition and conversion of raw materials to finished goods. Costs can be categorized as fixed costs and variable costs. Variable costs refer to the cost which changes with changes in the units produced. With the change in the number of units, the total variable costs change but the variable cost per unit remains the same.
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