Definition:

Variable expenses are those business expenses which vary depending on the volume of business, sales, or the volume of transactions.

Examples of variable expenses include:

• postage and shipping for customer purchases
  
• raw materials
  
• inventory of products to be sold
  
• hourly wages for producing products
  
• utilities in production areas
  
• sales commissions

Also Known As: Variable Cost

Examples: The pay of a sales person might include a fixed portion (the base salary) plus a variable portion (the commissions on sales).