Examples of variable costs

Variable costs are corporate expenses that vary in direct proportion to the quantity of output. Unlike fixed costs, which remain constant regardless of output, variable costs are a direct function of production volume, rising whenever production expands and falling whenever it contracts. Examples of common variable costs include raw materials, packaging, and labor directly involved in a company's manufacturing process.

The formula for calculating total variable cost is:

Total Variable Cost = Total Quantity of Output * Variable Cost Per Unit of Output

The term variable cost is not to be confused with variable costing, which is an http://www.investinganswers.com/term/accounting-835method related to reporting variable costs.

some examples would be cost of goods sold, sales commissions, shipping charges, delivery charges, costs of direct materials or supplies, wages of part-time or temporary employees, and sales or production bonuses