Are costs that are incurred for every unit of volume. Total variable costs change in direct proportion to changes in volume.

Variable cost increases for each new unit of volume produced. Hence as new products are produced the variable cost increases.

Explanation:

Unlike the fixed cost which is constant, e. g land; the variable cost changes and are not constant for each new unit of volume. Examples of variable cost includes, sales commission cost. We also have the mixed cost, which is a combination of fixed cost and variable cost.