Automatic Data Processing Inc. (ADP) is a global business outsourcing services provider headquartered in Roseland, N.J. ADP is one of the largest payroll outsourcing providers in the world, and was an early adopter of a cloud computing operating model. According to executives, the vendor cuts paychecks for one in six Americans.
The reverse of fixed costs are variable costs, which vary with changes in the activity level of a business. Examples of variable costs are direct materials, piece rate labor, and commissions.
Although these variable costs are direct costs, variable costs do not need to be directly related to the product. Unlike a direct cost, a variable cost does not have to be easily traceable to a cost object. A variable cost can also be an indirect cost.