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.
The Definition of Variable Costs. Variable expenses represent those daily spending decisions like eating at a restaurant, buying clothes, drinking Starbucks, and playing a round of golf with your buddies. These costs are not considered variable because theyâre discretionary. Rather, they're variable because the amount that you spend differs from month-to-month. While most variable costs represent discretionary spending (such as restaurants, Starbucks, and golf), some variable costs represent necessities.