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In business, there are two common types of expenses: variable and fixed. Variable expenses are those which change as production changes, whereas fixed charges are usually the same regardless of the amount produced in the short term.

Some examples of variable expenses for a packaged goods company:

-The cost of the product (raw materials, packaging)

-Labor and conversion costs at the factory (the more you produce the more labor will be required)

-Overheads at the factory (the more you produce, the more water and electricity you will use)

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Q: What is an example of a variable expence?
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