ECONOMICS

Detailed explanation-1: -For example, for a food truck, fuel is probably a fixed cost (it takes the same amount of fuel to move the food truck regardless of how much food the business sells) but fuel would be a variable cost for a delivery service like UPS (more packages delivered means more fuel).

Detailed explanation-2: -Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs.

Detailed explanation-3: -Although variable cost per unit remain constant, total variable cost increases and decreases in proportion to changes in the activity level.

Detailed explanation-4: -Shipping or delivery costs are often variable costs directly tied to the volume of sales and production.