Variable cost

variable cost  A variable cost remains the same per unit but changes in total Variable cost examples include sales commissions, hourly workers, and units-of-production method Variable cost examples · Cost of raw materials Perhaps these are the largest variable cost of most businesses · Direct labor costs

If sales or production fall, then those costs can also fall The easiest way to determine if a cost is variable, therefore, is to work out if Fixed costs remain constant They do not change and describe the business's financial scenario In contrast, variable costs keep changing

The most common variable costs include raw materials, direct labor, and shipping costs These costs are directly tied to the production volume and can change Variable costs are the expenses a business incurs that change with the amount of goods produced or services provided More specifically, when production or