Tuesday, December 23, 2008

Variable Cost Examples

Here are some examples of variable costs and their cost drivers in different types of industry. It is important to note what the cost driver is and how it affects the expense.

Industry

Cost

Cost Driver

Manufacturing

Direct Materials

Number of units produced

Law Firm

Payroll

Number of hours

Airline

Fuel

Number of miles flow

Hotel

Housekeeping costs

Number of rooms occupied

Tire Factory

Rubber

Number of rubber used

Country Club

Food cost

Number of members

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The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.