What is the definition of a Variable Cost in Stock market?

A variable cost is the costs generated by a company that vary with output. An example may be fast food costs or assembling items during shipment.  It clearly has nothing to do  directly with the sales or the fast-food The total cost of producing a good or service can be split into two parts:

  • A percentage of fixed costs
  • Variable cost per item

If a company suddenly stops all production, its variable costs will fall to zero.

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