what are variable expenses

Variable expenses are costs that change from month to month or with the quantity of goods or services produced by a business. They are the sum of marginal costs over all units produced. Examples of variable expenses include groceries, dining out, medical expenses, sales commissions, labor costs, and shipping expenses. Variable expenses can be contrasted with fixed expenses, which generally cost the same amount each month, such as rent, mortgage payments, or car payments. Understanding the difference between fixed and variable expenses is important for budgeting and planning.