Variable Cost

Variable Cost - Variable or varying costs, expenses, expenditure changes and fluctuations are affected by many things. Debt obligations and changes due to changing costs are harder to plan and budget for. Unexpected expenses can also add up to quickly negatively impact business and bottom line.  Utilities, electricity bills illustrate these principles, challenges and realities, very well. Resource planning, maintenance, operational costs can occur due to downtime, overtime, increased volume, or energy consumption, impacting all aspects of the business including the bottom line! Labour increases are typical culprits in this category, as are consumption increases, emergencies, or strike actions. Building contingency and cushions into budgeting processes to offset this are typical practice. Variable cost left unbridled or underestimates can very easily destabilize or undermine the very financial stability of a business.