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Variable costs change 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.
What are examples fixed costs?
Fixed costs tend to be costs that are based on time rather than the quantity produced or sold by your business.
Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs.
What is variable cost example?
Examples of variable costs include a manufacturing company's costs of raw materials and packaging—or a retail company's credit card transaction fees or shipping expenses, which rise or fall with sales. A variable cost can be contrasted with a fixed cost.
Learn more about fixed and variable costs here:
