What are variable costs commonly expressed as?

Variable costs are commonly expressed as a percentage of revenues because they fluctuate in direct relation to the volume of production or sales volume. As sales increase or decrease, the associated variable costs, such as materials, labor directly tied to production, and shipping expenses, also change. By expressing variable costs as a percentage of revenues, businesses can better understand how their costs will vary as sales change, allowing for more precise budgeting and financial forecasting.

In contrast, other forms of expression like flat fees or fixed amounts do not capture the fluctuating nature of variable costs, as they remain constant regardless of sales volume. Rates per hour generally relate to labor costs and are often considered a part of either fixed or variable labor costs depending on the employment structure, but do not broadly define the nature of variable costs as they pertain to overall revenue.