Chapter 21, Problem 1DQ

To determine

21-1DQ

Introduction:

Variable cost:

Variable cost is a method used for computing product cost. It is sum total of all variable components which include Variable material cost, Variable labor cost and variable manufacturing overheads. The main feature of variable costing is that cost under this method is incurred only when product is produced. It means if no production is done then at least no variable cost will be incurred.

Define variable cost and identify two variable cost