It costs you $60 which is the variable cost and you sell it for $100 (this is the price).
If you sell 100 widgets (the quantity) the variable costs will be $6,000 and if you sell 50 widgets the variable cost is only $3,000. It varies directly with your sales volume (or quantity).
Now, if you sell a widget for $100 and it costs you $60, then you've made a profit of $40 on each sale... displayed 300 characters
DO YOU NEED AN ESSAY? Here are the options you can choose from:
Order plagiarism free custom written essay.
All essays are written from scratch by professional writers according to your instructions and delivered to your email on time. Prices start from $10.00 /page.
FULL ACCESS TO ESSAYS DATABASE
This option gives you the immediate access to all 184 988 essays.
You get access to all the essays and can view as many of them as you like for as little as $28.95/month.
Your research paper is written by certified writers
Your requirements and targets are always met
You are able to control the progress of your writing assigment
You get a chance to become an excellent student!
It varies directly with your sales volume (or quantity).
Now, if you sell a widget for $100 and it costs you $60, then you've made a profit of $40 on each sale. This is the gross profit or gross margin.
But you still have to pay your fixed costs to end up with your net profit.
If your fixed costs for expense items such as rent, leases, insurances etc are $3,000 and you sell 100 widgets and make a gross margin of $40 on each one, then your total gross margin is $4,000 and after deducing your fixed costs of $3,000, you will end up with a "net profit" of $1,000... displayed next 300 characters
Why, is this, a variable cost? It is a variable cost because it changes according to the level of cost-driver. The cost of the Item: Building Rent is a fixed cost that is not immediately affected by changes in the cost-driver level...
The fixed costs will be incurred anyway, and in the short term they should be disregarded. In making these decisions, the variable costs provide a good measure of the differential costs that need to be assessed...
Our aim is to provide a new option which can help students write their researches taking as guideline excellent examples of any kinds of papers. This option is new and progressive; it is even easier than buying a custom written paper! Due to this service you can find and choose what you need by yourself without paying almost anything.