Answered by AI, Verified by Human Experts
Thevariable expense ratiois calculated bydividingvariable expenses by a certain value. This ratio is used to assess the proportion of variable expenses in relation to the value being measured.The variable expense ratio is afinancial metricthat helps analyze the relationship between variable expenses and a specific measure or base. Variable expenses arecoststhat change in direct proportion to changes in the level of activity or production. To calculate the variable expense ratio, we divide the total variable expenses by the chosen base or measure. The base or measure used in the denominator of the ratio depends on thecontextand the specific analysis being conducted. It could be units produced, sales revenue, labor hours, or any other relevant factor that varies with the level of activity. By dividing the variable expenses by the chosen base, we obtain the variable expense ratio, which represents the proportion of variable expenses relative to the chosen measure. Thevariable expense ratiois often used in cost analysis and budgeting to understand the impact of changes in the level of activity on variable expenses. It helps businesses assess the cost structure and make informed decisions regarding pricing, production levels, and resource allocation.Learn more aboutvariable expense ratiohere:brainly.com/question/30158879#SPJ11...