What are the costs associated with variable expenses?

Variable expenses are costs that fluctuate based on the level of production or the volume of goods or services produced by a business. These expenses are directly tied to the operational activities of the company. The correct answer highlights that variable expenses are primarily related to raw materials and delivery, indicating that as production increases, the costs of the raw materials and the associated delivery expenses will rise correspondingly.

For example, if a business produces more products, it will need more raw materials to create these products, leading to higher costs. Similarly, increased production may result in higher delivery costs to distribute the additional output. Understanding the nature of variable expenses is crucial in financial planning and budgeting, as it allows businesses to predict costs and manage resources effectively as production levels change.

The other options refer to costs that do not vary with production levels, such as fixed costs like monthly rent and salaries, which remain constant regardless of output. This distinction is essential for proper financial management in business operations.