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What Is An Example Of A Variable Expense. A variable cost is a cost that changes in relation to variations in an activity. Thus, the materials used as the components in a product are considered variable costs, because they vary directly with the number of units of product manufactured.

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Total variable costs are found by calculating: Total variable costs = Quantity of products produced x Variable cost per unit. If the differences between the two still seem unclear, you should get a better sense of them with the examples of fixed vs. variable expenses below. The fixed portion of a semi-variable cost is fixed up to a certain production volume.

Trimming a fixed cost, like your cell phone plan, insurance or your cable package, requires only making a decision once, and then living with that decision for the next several months or years.

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Some of these examples of variable costs fall into both necessary and discretionary spending. Variable Cost Ratio = Variable Costs / Net Sales. On the other hand, real estate property taxes and fire and liability insurance premiums are fixed for a period of time.

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Trimming a fixed cost, like your cell phone plan, insurance or your cable package, requires only making a decision once, and then living with that decision for the next several months or years.

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