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.
Variable costs, on the other hand, are costs that do change depending on how much output the firm produces. Variable costs include items such as labor and materials since more of these inputs are needed in order to increase output quantity. Therefore, total variable cost is written as a function of output quantity.