ECONOMICS

Detailed explanation-1: -Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs.

Detailed explanation-2: -Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees.

Detailed explanation-3: -Direct labor includes all employees responsible for producing a company’s products or services. Some examples of direct labor include quality control engineers, assembly line workers, production managers and delivery truck drivers.

Detailed explanation-4: -Labor costs are also classified as fixed costs or variable costs. For example, the cost of labor to run the machinery is a variable cost, which varies with the firm’s level of production.

Detailed explanation-5: -Examples of direct costs LIFO can be helpful if the costs of your materials fluctuate in the course of production. Usually, most direct costs are variable. Smartphone hardware, for example, is a direct, variable cost because its production depends on the number of units ordered.