In the long run, the cost of factory rental becomes a variable cost.
Costs that fluctuate in line with variations in the volume of a company's output are known as variable costs. Total marginal costs across all units produced to make up variable costs.
Additionally, they can be regarded as typical expenses. There are two parts to overall cost: fixed expenses and variable costs. Costs that are immediately connected to a certain cost object are referred to as direct costs.
All variable costs, though, are not necessarily direct expenses. For instance, variable manufacturing overhead expenses are variable expenses that are indirect, not direct, expenses. As they change depending on the quantity generated, variable costs are also known as unit-level costs.
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