Variable costs are costs that change in proportion to the good or service that a business produces. Variable costs are also the sum of
marginal costs over all units produced. They can also be considered normal costs.
Fixed costs and variable costs make up the two components of
total cost.
Direct costs, however, are costs that can easily be associated with a particular
cost object. However, not all variable costs are direct costs. For example, variable manufacturing
overhead costs are variable costs that are
indirect costs, not direct costs. Variable costs are sometimes called unit-level costs as they vary with the number of units produced.