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.
A: In economics, variable cost and fixed cost are the two main costs a company has when producing goods and services. A company's total cost is composed of its total fixed costs and its total variable costs. Variable costs vary with the amount produced. Fixed costs remain the same, no matter how much output a company produces. A variable cost is a company's cost that is associated with the amount of goods or services it produces. A company's variable cost increases and decreases with the production volume. For example, suppose company ABC produces ceramic mugs for a cost of $2 a mug.