variable costs
Output-dependent expenditures
Variable costs are business expenses that change in proportion to production or sales volume.
Raw materials, direct labor, and shipping costs rise when output increases and fall when it decreases.
Variable costs contrast with fixed costs, which remain constant regardless of activity level: Our variable costs per unit dropped as we negotiated better supplier rates.
- expensesMoney spent on things
- marginal costPer-unit production increase expense
- direct laborWorkers directly making products
- raw materialsUnprocessed production inputs
- expenditureMoney paid out
contribution margin · cost control · piece rate · outlay · cost of goods sold · cost structure · budgeting · unit cost · operating expenses · wages · utilities · breakeven · output · economy of scale · volume · labor · fluctuating · flexible
- business financeaccounting, balance sheet, revenue stream, profit margin, budget
- business termsfranchising, revenue stream, board meeting, gross margin, markdown
- personal financesavings, income, credit, investments, bills
- budgetingbudget, budgets, budget app, budget template, budget allocation
- accountingbookkeeping, ledger, balance sheet, general ledger, accounts payable
- supply chainsupply, supplier, delivering, suppliers, vendor
variable costsfixed costs
Expenses unchanged by output
overhead costs · overhead · sunk costs · contractual obligations · rent
costs, varied, variation, variable, varying, variant, variance, invariably, invariable