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Variable cost

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Variable cost

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.
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    Posts
  • June 4, 2020 at 6:23 pm #572874
    hsnhn
    Member
    • Topics: 5
    • Replies: 5
    • ☆

    Sir
    I am very good with the calculations pertained with
    Cost classification but

    I still do not understand
    What the difference between

    Short term variable cost and
    Long term variable cost is !!!

    Please be kind enough to reply sir .

    Hoping for a positive reply

    Thank you………

    June 5, 2020 at 9:56 am #572888
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    Short term variable costs vary with the level of production – for example the more units are produced the more the total cost of materials will be.

    Long term variable costs are fixed in the short-term but might change over time – for example the cost of maintaining the machines in the factory might be fixed in the short-term but if they improve their way of working and become more efficient then the cost might change in the longer term.

    The distinction is unlikely to be relevant for Paper MA.

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