One factor that can contribute to the change in business expenses has to do with the amount of revenue that a business brings in based on the goods or services that it provides. What is this factor known as?

Answer 1

This factor is known as "variable costs." Variable costs are expenses that change in direct proportion to the production volume or level of sales revenue. As a business increases its sales by providing more goods or services, its variable costs (such as raw materials, labor, and shipping) will also increase. Conversely, if sales decrease, variable costs will decline as well. This relationship plays a crucial role in determining overall business expenses and profitability.