Which of the following is an example of a variable cost?

A.

Rent for a warehouse

B.

Paychecks for salaried employees

C.

Materials for making a product

D.

Monthly payments on a loan

answer would be C

C) Materials for making a product.

Variable costs are costs that go up and down based on a variety of factors. Rent for a warehouse will be the same every month for the duration of the lease, and won't change based on production or anything else.

Salaried employees are paid a fixed amount regardless of their hours each week (unlike hourly/non-exempt employees) so this would not change either.

Finally, the payments on a loan are generally the same from month to month.

Materials used in making a product are a variable cost because if you make more of the product, your cost for materials goes up. If you make less of it, the cost goes down.