Inventory or Materials
Salaries and wages
Supplies
Repairs & maintenance
Advertising
Car, delivery and travel
Accounting and legal
Rent
Telephone
Utilities
Insurance
Taxes (Real estate, etc.)
Interest
Depreciation

which ones are variable costs??

Inventory and Materials
Car, delivery and travel

I would normally assume taxes, but real estate tax wouldn't vary so I'm not sure.
And it depends on the type of interest.

Variable costs change according to your production output
so it depends how each of the above examples are used...
normally pretty much everything except for advertising, legal, rent is variable

I suppose an easier way to understand it would be to ask your self
'Is it a fixed cost?'

if not... its variable

This post was edited by Branket on Mar 29 2014 09:40pm

Think of it like this, if you produce more units, wiIl "______ increase?"

If I produce 5 more ice creams, will inventory/materials change? Yes variable cost


Salaries and wages? No. Youre not going to get paid $12 an hour compare to $11 just because the units produced Increased. However if this just said wages, id give a different answer because it affects the labor costs, activity x wage = increase

Will you need more supplies to produce more units? Yes (direct supplies that you need to make your product)

Is advertising cost going to increase because you produce 5 extra? No


Depreciation, insurance, taxes, repairs, interest are fixed costs


Variable costs respond directly towards the change in activity

Is rent cost relative towards the production output activity or the monthly use of land.. first one so variable