Variable Cost (Entrepreneurial Finances) - Definition, Examples, Advice | Bolder Money

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Definition

Spending that changes with the level of production or sales. Knowing these costs helps adjust pricing when sales go up or down.

What to consider

Understand the impact on your break-even analysis.
Plan fixed costs even in slow periods.
Review contracts periodically for potential renegotiation.

Real world scenarios

A business pays a constant monthly rent regardless of sales volume.
A startup has fixed salaries that do not change with revenue fluctuations.
A retailer incurs set utility and insurance costs every month.

Related terms

Entrepreneurial Finances

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