average variable cost

  

Definition

Variable cost divided by number of units produced. Formula: Variable costs ÷ total output.

Use this term in a sentence

  • We needed to determine the average variable cost of the item because it would help us later on in the day.

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  • You should figure out what the average variable cost of your product is and then market it to the people that can afford it.

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  • As we produced more units last quarter, average fixed cost decreased because rent and taxes stayed the same but average variable cost increased because the cost of raw materials increased over the same period.

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