MANAGEMENT

Detailed explanation-1: -Common examples of variable costs include costs of goods sold (COGS), raw materials and inputs to production, packaging, wages, and commissions, and certain utilities (for example, electricity or gas that increases with production capacity).

Detailed explanation-2: -For example, the packaging costs associated with a product would be a variable cost since the packaging costs would increase as sales increased. The raw materials used to make the product would also be variable costs since the cost of materials would rise and fall depending on sales volume of the product.

Detailed explanation-3: -Variable cost FAQ Examples of variable costs include raw materials, sales commissions, packaging and shipping, manufacturing labor, and credit card fees.

Detailed explanation-4: -Packaging cost Another example of a variable cost is the packaging because the amount of packaging required relates to the number of products being produced and packaged. Some companies use their packaging strategically, using less packaging when their sales or production volume is decreasing.