Variable costs
Variable costs change with the quantity of output produced or sold — materials, goods for resale, third-party work, transport, and wages paid by deployment.
Definition
They are the basis of the contribution margin and therefore of every price floor. Whoever does not know them calculates with mark-up rates on hunch — which in a competitive market costs either jobs or money.
In service businesses the allocation is harder than in trade: is the working hour of a permanently employed member of staff variable? For costing yes, for liquidity no.
What the software must be able to do
The check is whether a cost price can be held per item and a cost rate per employee — and whether those rates feed into the job analysis.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Current assets Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Volunteer-run structure Voucher Year-end closing modules