Variable costs are best described as what?

Variable costs are defined as expenses that change in direct proportion to the volume of goods or services produced. As production increases, variable costs increase; conversely, as production decreases, variable costs decrease. This characteristic is fundamental because it differentiates them from fixed costs, which remain constant regardless of output levels. Common examples of variable costs include materials, labor directly associated with production, and other costs that are incurred only when production is underway.

The other descriptions do not accurately capture the essence of variable costs. For instance, costs that remain constant regardless of output pertain to fixed costs, while costs that occur only once usually refer to one-time expenses unrelated to production levels. Additionally, labor costs can frequently be classified as variable costs if they vary with production, so it's misleading to state that variable costs do not include labor.