![]() ![]() ![]() Imagine a factory that produces pencils - the cost of renting the factory building will remain the same, month after month, no matter how many pencils the company actually produces.Ī variable expense, on the other hand, is pegged to a company’s productivity or sales. Costs like rent and administrative salaries are fixed costs, which remain the same no matter how much a business is producing. What is a Variable Expense?īusiness expenses can be classified as either fixed (invariable) or variable.Ī fixed expense does not change based on a business’s other activities. Keep reading to learn more about why this is such an important business metric. Intrigued? This article will explore how the variable expense ratio is calculated and where it’s used. This is a useful metric that can help businesses in matters like pricing and production scheduling. ![]() The variable expense ratio expresses a company’s variable expenses as a percentage of its net sales. Variable expense ratio - also called the variable cost ratio - is a means of understanding how variable costs impact a business’s net profits. The FinTalk Blog Strategy and trends in payments.Customer Stories See how we transform finance operations.Why Tipalti A modern, holistic, powerful payables solution that scales with your changing business needs.The Tipalti Platform Global, scalable, and fully automated.Expenses Mobile ready integrated expenses and global reimbursements.Global Partner Payments Scalable mass payout solutions for the gig, ad tech, sharing, and marketplace economies.Procurement Complete control and visibility over corporate spend.Accounts Payable Automation End-to-end, global payables solution designed for growing companies. ![]()
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