{"id":8188,"date":"2024-11-08T18:18:10","date_gmt":"2024-11-09T00:18:10","guid":{"rendered":"https:\/\/www.blockadvisors.com\/resource-center\/?p=8188"},"modified":"2024-11-13T18:27:43","modified_gmt":"2024-11-14T00:27:43","slug":"variable-costs","status":"publish","type":"post","link":"https:\/\/www.blockadvisors.com\/resource-center\/finance\/variable-costs\/","title":{"rendered":"What is Variable Cost: How it\u2019s Calculated for Small Businesses"},"content":{"rendered":"
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If you\u2019re a small business owner or looking to start your dream business<\/a>, keeping track of expenses is a very involved aspect of maintaining a business. When looking at the production of your business\u2019s goods and services, two types of expenses you will come across are fixed costs (FC) and variable costs (VC).<\/p>\n\n\n\n

When weighing the differences between fixed vs variable cost, there are a few things to note. These costs can be nuanced. Some people understandably get confused because VC depends on output. This means that they fluctuate (hence, they are “variable<\/em>“) depending on your level of production or sales. Fixed costs remain steady. Understanding fixed vs variable costs can provide valuable insights used to make sound financial decisions. So, let\u2019s answer the question, “What are variable costs?” We’ll also share how to find variable costs, how to calculate variable costs, and why it matters to your small business. Read on!<\/p>\n\n\n\n

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What is variable cost?<\/h2>\n\n\n\n

Variable cost refers to expenses that change in proportion to how much your business produces or sells. These costs rise as production increases and fall as production decreases. They can be directly or indirectly related to the actual product or production process.<\/p>\n\n\n\n

Examples include:<\/p>\n\n\n\n