Variable costs are costs for which the amount varies according to the level of activity of the company. For example, the amount of fees on card payments made on an e-commerce site depends on the volume and amount of transactions made during the month, or the amount of fuel expenses for a taxi depends on the distance travelled during the month.
Conversely, fixed costs are costs for which the amount is fixed, regardless of the level of activity of the company. For example, the cost of your broadband.
Was this page helpful?