Learn in the textbookBreak-Even Point Analysis
DefinitionVariable costs (変動費) are costs that rise and fall in proportion to sales or production volume.
ExplanationExamples include raw materials, the purchase cost of goods for resale and fees paid per unit sold. If the variable cost per unit is constant, doubling sales volume doubles total variable costs. Plot total costs against sales volume and fixed costs set the height where the line starts, while the variable cost per unit sets its slope.
AnalogyIt is like fuel for a car: the farther you drive, the more you spend, and if you leave the car parked it costs nothing.