Is office rent a variable cost?

Property insurance and office rent are fixed costs, and variable and fixed production costs are a cost calculation method.

1, variable cost method is also called direct cost method. It means that the product cost only includes the direct materials, direct labor and variable manufacturing expenses consumed in the production process of the product, and the fixed manufacturing expenses are fully included in the income statement as the current cost, as the deduction of the current sales income.

2. Absorption cost method refers to a cost calculation method in which the product cost includes all production costs (variable and fixed production costs).

Cost classification

According to the causes of variable costs, variable costs can be divided into two categories. One is technical variable cost, and the other is discretionary variable cost.

1. Technical variable cost refers to the cost that the unit cost is determined by technical factors, and the total cost changes in direct proportion to the change of consumption, usually manifested as the direct material consumption cost of the product.

2. Discretionary variable costs refer to variable costs that can be changed by enterprise management.