Variable Costs - GCSE Business Definition

Reviewed by: Steve Vorster

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Variable costs change with the level of output or production a business experiences. For GCSE Business students, it's important to understand that these costs increase as more products are produced and decrease when production levels drop. Common examples of variable costs include raw materials, direct labour, and utility costs directly associated with the manufacturing process.

Unlike fixed costs, which remain the same regardless of output, variable costs fluctuate with the business's operational activity. They are crucial for calculating the total cost of production and for decision-making related to pricing and budgeting.

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Steve Vorster

Reviewer: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.

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