A good example of a variable costs is the food cost associated with an entre. If a restaurant’s food cost is 33%, expect that for every dollar in sales, $0.33 will be deducted from that one sales dollar. If the restaurant does not make that sale, the food cost is avoided. Hourly labor is also a variable cost .
Examples of Household Variable Expenses The cost of household maintenance such as painting or yard care. General expenses such as clothing, groceries, and car maintenance. Resource expenses such as fuel, electricity, gas, and water. Other expenses such as entertainment or dining out.
Variable costs vary based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.
Examples of variable costs Direct materials. The most purely variable cost of all, these are the raw materials that go into a product. Piece rate labor. Production supplies. Billable staff wages. Commissions. Credit card fees. Freight out.
A variable expense is one that fluctuates each month. Some examples of variable expenses you may have can include: Utility bills such as electric, gas and water. Food expenses .
Examples of fixed costs include rental lease payments, salaries, insurance, property taxes, interest expenses , depreciation, and potentially some utilities.
Examples of variable costs are sales commissions, direct labor costs , cost of raw materials used in production, and utility costs . The total variable cost is simply the quantity of output multiplied by the variable cost per unit of output.
There are three major types of expenses we all pay: fixed, variable, and periodic.
Calculate total variable cost by multiplying the cost to make one unit of your product by the number of products you’ve developed. For example, if it costs $60 to make one unit of your product, and you’ve made 20 units, your total variable cost is $60 x 20, or $1,200.
Variable expenses are defined as such because the amount you spend may vary each month. Although variable costs are quite often discretionary expenses, some may be necessities. Buying gas for your car each month is a variable expense, as are car repairs and maintenance. Grocery shopping is also a variable expense.
In mathematics, a variable is a symbol or letter, such as “x” or “y,” that represents a value. For example , in the equation below, y is the “dependent variable ” because its value is based on the value assigned to the “independent variable ” x.
Variable costs vary with increases or decreases in production. Fixed costs remain the same, whether production increases or decreases. Wages paid to workers for their regular hours are a fixed cost . Any extra time they spend on the job is a variable cost .
A variable is any factor, trait, or condition that can exist in differing amounts or types . An experiment usually has three kinds of variables : independent, dependent, and controlled. The independent variable is the one that is changed by the scientist.
Ways to Reduce Variable Costs Scrutinize your products or services. Find out which of them are the most or the least cost -effective. Make variable costs your target. Question every aspect of your business. Monitor your variable cost constantly.
The shifting amounts, behind variable expenses , makes planning for them in your business budget more difficult – but not impossible. There is not an exact science to budgeting for variable expenses , but there are some tricks you can use to make sure they don’t throw company’s budget off the rails.