How are "variable costs" defined in business?

Variable costs are defined as costs that fluctuate according to production volume. This means that as a business increases or decreases its production levels, these costs will rise or fall correspondingly. For instance, if a company manufactures more products, it will typically incur higher costs for materials, labor, and utilities directly associated with that production.

Understanding variable costs is vital for pricing strategies, budgeting, and financial planning. They play an integral role in determining the overall cost structure of a business, particularly in manufacturing and service industries where resources are used in direct relation to output.

The other options describe aspects of business costs but do not align with the definition of variable costs. For example, consistent expenses irrespective of production levels would be categorized as fixed costs, while salaries are typically classified as fixed costs as well. Hence, the correct definition aligns with how variable costs behave in relation to the level of production.