Page 41 in the book "Business Model Generation" :

Cost Structures can have the following characteristics:

Variable costs

Costs that vary proportionally with the volume of goods or services produced.

Can any body give some examples?

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If you were running a restaurant: rent, staff, advertising would be fixed costs, they are predictable and should remain fairly constant from month to month. Food supplies, disposables such as napkins, are variable costs, they would change based on the level of business i.e. how many customers, or meals you have to prepare.

In manufacturing your cost of goods sold should drop as you manufacture more product. This is economy of scale. The larger the order of raw materials the less they should cost you per unit.


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