Variable Cost Explained in 200 Words (& How to Calculate It)

There’s a frustrating truth every business deals with early into its growth. To reveal that truth, I’ll start with a song title by hip-hop legend, The Notorious B.I.G.: “Mo money, mo problems.” The Notorious B.I.G. is literally saying “more money, more problems.” And although this hit song doesn’t dive into the intricacies of accounting, it does support a frustrating truth about business: the more revenue you generate from sales, the more you’ll have to spend to keep selling. Let’s unpack why that’s the case with one of the most important…

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