Definition: Variable expenses change depending on your consumption of a good or service. A variable expense is a cost that changes significantly from period to period, such as week to week, month to month, quarter to quarter or year to year.
Typical household variable expenses are household maintenance expenses such as painting or yard care, general expenses such as clothing, groceries, and car maintenance and fuel, and utilities such as electricity, gas and water.
In small business a variable cost is an expense that changes according to production or in some business, weather conditions. Typical small business variable expenses are costs for raw materials, water if used in production, and office supplies. If a small business were to cease production, variable costs would be nonexistent.
Also Known As: Variable Cost
Examples:
I kept to my budget this winter by turning back the thermostat while I was out of the house to save on my energy bill.