DEFINITIONS-

VARIABLE COSTS-
A cost of labor, material or overhead that changes according to the change in the volume of production units. Combined with fixed costs, variable costs make up the total cost of production. While the total variable cost changes with increased production, the total fixed costs stays the same

COSTS-
Cost is the value that must be given up to acquire a good or service.

FIXED COSTS-
A cost that does not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.