In facility operations, what would be considered a variable expense?

In facility operations, variable expenses are costs that fluctuate based on the level of activity or volume of services provided. Hourly labor costs are a prime example of a variable expense because they are directly tied to the number of hours worked. If a facility has more events or requires additional workforce for specific tasks, the number of hours worked can increase, thus increasing the total labor cost.

Salaried labor costs, on the other hand, are considered fixed expenses. These costs remain constant regardless of the number of hours worked since they are typically set salaries for employees that do not change with workload fluctuations. Maintenance costs can sometimes be variable as well, depending on how often maintenance needs to be performed, but they typically have a fixed component. Insurance premiums are generally fixed costs, as they do not change based on the level of activity within the facility. Therefore, hourly labor costs directly align with how variable expenses are classified in relation to facility operations.