The variable cost remains the same because the volume does not change.
Most of these crafts people are considered variable cost in the budget.
There are also variable costs, such as those for wages.
Apparently, he is considering only fuel and some variable cost.
If variable costs play an important role in the business plan, it may be helpful to include a cost allocation model.
The firm in the example will leave the industry unless it can reduce variable costs or increase revenue.
The model works best in industries that have low variable cost of production or inventory.
Therefore it gives us the profit added per unit of variable costs.
Also try to make savings on your variable costs, which are linked to how much you produce or sell.
Finally, both variable and institutional costs are adjusted for labor cost differences.
