Variable cost

example

• As this company builds cars the variable would be how many cars are shipped
• and how many cars are left over even after paying laborers 
• to build the cars regardless of them being shipped or not

Direct material cost

• These are the raw materials that go into making a product.
• For example: shingles, bricks and windows would be direct materials 
• when building a house

Direct Labor cost

• The laborers who make or build the products.
• These are the people you see at construction sites with hammers
• and saws in their hands.

NOt direct material or direct labor?

• This would be called "overhead"
• These are costs such as heat, water, and electricity