Variability of costs

Variability of costs refers to the way expenses can fluctuate over time or across different situations. For example, factors like changes in supply prices, demand, or production methods can cause costs to increase or decrease. Understanding cost variability helps businesses plan budgets more accurately and make informed decisions about pricing, investments, or operations. It highlights that not all costs are fixed; some are unpredictable and can vary depending on external or internal factors, impacting overall profitability and financial stability.