variable cost
nounUK /ˈveəriəbl kɒst/
US /ˈveriəbl kɔst/
A cost that changes depending on how much you make or do.
The bakery's variable cost for flour goes up when they bake more bread.
RELATED WORDS
OTHER MEANINGS
2. In accounting, an expense that rises or falls directly with the number of goods produced or services provided.
Packaging materials are a variable cost because each extra item needs its own box.
3. In business planning, a cost item that is not fixed and must be estimated for different activity levels.
The manager listed labor and shipping as variable costs in the quarterly forecast.
4. In economics, a cost that varies with output in the short run, as opposed to a fixed cost.
Economists study variable costs to understand how firms adjust production.