What are Variable Expense?

Variable Expense (Definition)

Variable expenses are expenses that change depending on how often you use a product or service. Budgeting for variable expenses can be more difficult than with a fixed expense as it can be more challenging to determine what the cost will be from month to month. The good thing about variable expenses is that you can easily change your variable costs of production when there is a drop in sales or production. A variable expense could include anything from the equipment you purchase or hire, casual staff payment rates, or the cost of raw materials and packaging, which can rise or fall depending on the volume of sales.