{"id":1103,"date":"2019-07-01T15:08:11","date_gmt":"2019-07-01T15:08:11","guid":{"rendered":"https:\/\/sage-new-clone.local\/en-au\/blog\/?post_type=sage_glossary&#038;p=1102"},"modified":"2026-05-18T23:55:28","modified_gmt":"2026-05-18T13:55:28","slug":"what-are-variable-costs","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-are-variable-costs\/","title":{"rendered":"What are variable costs?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/\" class=\"entry-header__link\">Glossary definition<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat are variable costs?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What are variable costs?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-are-variable-costs\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-variable-costs\">Variable costs<\/h2>\n\n\n\n<p>Variable costs are the costs a company incurs proportionately to production quantity or <a href=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-is-revenue\/\">revenue<\/a>. The general variable cost definition includes any costs that fluctuate depending on how much product a company produces or revenue it creates otherwise. If a project demands larger investment from the company, the costs associated with the project as it grows\u2014cost of labour, material, etc.\u2014are considered variable costs.<\/p>\n\n\n\n<p>To calculate variable cost: add together all fluctuating expenses outlined above within a specified period of time.<\/p>\n\n\n\n<p>The implication of high variable costs for a company is more room for fluctuation in production output while still maintaining profitability. Conversely, companies with high variable costs will yield lower marginal profits than those with high fixed costs. Variable cost is paired with its opposite, fixed cost, in evaluating the total cost structure of a company.<\/p>\n\n\n\n<p>&nbsp;<\/p>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this term<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-au\/blog\/tag\/accounting-tips\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tAccounting tips\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-au\/blog\/tag\/expenses\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tExpenses\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-au\/blog\/tag\/revenue\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tRevenue\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-au\/blog\/tag\/small-business\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tSmall business\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/section>\n\n<div class=\"alignfull wp-block-sage-related-posts\">\n\t<section class=\"related-posts card-grid has-dark-background-color\">\n\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t<div class=\"col\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--featured h1\">Explore more wisdom<\/h2>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\t\t<div class=\"row related-posts__featured\">\n\t\t\t\t<div class=\"col card-grid__item\">\n\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-0 post-3276 post type-post status-publish format-standard has-post-thumbnail hentry category-growth-customers category-money-matters category-strategy-legal-operations tag-accounting-tips tag-business-intelligence tag-business-management tag-how-to-grow-your-business tag-technology business_type-medium-sized-business card-post--is-clickable\"\n>\n\t<div class=\"card-post__media-wrapper\">\n\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1057253610-1440x810.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1057253610-684x384.jpg 684w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1057253610-768x432.jpg 768w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1057253610-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-07-12T11:57:56+10:00\">July 12, 2023<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">5 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-au\/blog\/how-to-use-saas-kpis-to-survive-a-market-downturn\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tHow to use SaaS KPIs to survive a market downturn\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tMost people are at least somewhat on edge about the economy at the moment, and SaaS companies are also seeing cause for concern. But if you can maintain your sense of focus and prioritise your key performance indicators (KPIs), you should be able to survive or even thrive during the market downturn. SaaS KPIs matter [&hellip;]\t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-3278 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations category-technology-innovation tag-accounting-tips tag-business-case tag-business-intelligence tag-cfo tag-making-financial-decisions business_type-medium-sized-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-au\/blog\/predictive-kpis-for-saas-companies\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1070958794-1-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1070958794-1-684x384.jpg 684w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1070958794-1-768x432.jpg 768w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1070958794-1-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-07-12T11:50:06+10:00\">July 12, 2023<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">4 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tPredictive KPIs for SaaS companies\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-3277 post type-post status-publish format-standard has-post-thumbnail hentry category-growth-customers category-money-matters tag-accounting-tips tag-business-intelligence tag-cfo tag-technology business_type-medium-sized-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-au\/blog\/give-your-executive-team-the-metrics-they-need-to-succeed\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1288428995-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1288428995-684x384.jpg 684w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1288428995-768x432.jpg 768w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1288428995-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-07-12T11:19:52+10:00\">July 12, 2023<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">5 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tGive your executive team the metrics they need to succeed\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-1998 post type-post status-publish format-standard has-post-thumbnail hentry category-growth-customers tag-accounting-practice tag-accounting-tips tag-accounting-trends tag-customer-retention business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-au\/blog\/what-service-offerings-do-clients-need-in-a-post-covid-world\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-909599970-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-909599970-684x384.jpg 684w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-909599970-768x432.jpg 768w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-909599970-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2020-08-26T15:30:50+10:00\">August 26, 2020<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">6 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat service offerings do clients need in a post-COVID world?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-1967 post type-post status-publish format-standard has-post-thumbnail hentry category-technology-innovation category-today tag-accounting-practice tag-accounting-tips tag-accounting-trends tag-crm business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-au\/blog\/crm-help-your-practice-grow\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1314040262-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1314040262-684x384.jpg 684w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1314040262-768x432.jpg 768w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1314040262-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2020-06-26T14:56:22+10:00\">June 26, 2020<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">3 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tHow can a CRM system help your practice grow?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Variable costs Variable costs are the costs a company incurs proportionately to production quantity or revenue. The general variable cost definition includes any costs that fluctuate depending on how much product a company produces or revenue it creates otherwise. If a project demands larger investment from the company, the costs associated with the project as [&hellip;]<\/p>\n","protected":false},"author":346,"featured_media":0,"template":"","meta":{"_sage_video":false,"footnotes":""},"tags":[208,157,187,200],"class_list":["post-1103","sage_glossary","type-sage_glossary","status-publish","hentry","tag-accounting-tips","tag-expenses","tag-revenue","tag-small-business"],"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Australia","distributor_original_site_url":"https:\/\/www.sage.com\/en-au\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary\/1103","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary"}],"about":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/types\/sage_glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/users\/346"}],"version-history":[{"count":1,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary\/1103\/revisions"}],"predecessor-version":[{"id":4527,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary\/1103\/revisions\/4527"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/media?parent=1103"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/tags?post=1103"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}