Definition:
Variable expenses are those business expenses which vary depending on the volume of business, sales, or the volume of transactions.
Examples of variable expenses include:
- postage and shipping for customer purchases
- raw materials
- inventory of products to be sold
- hourly wages for producing products
- utilities in production areas
- sales commissions
Also Known As: Variable Cost
Examples:
The pay of a sales person might include a fixed portion (the base salary) plus a variable portion (the commissions on sales).
