Variable Costing Example
This video discusses the difference between brand name and generic products. Near the beginning of the video, the narrator discusses how many name brand companies actually produce “generic products” that compete with name brand products. This a is an example of variable costing in action as it shows the name brand producer recognizing that the additional variable costs of producing the generic products are less than the additional sales.
Variable Costing for Service Firms
This CBS video discusses a hotel booking app called Hotel Tonight. The premise of the business is that hotels will offer discount pricing on last-minute bookings to fill empty rooms. This concept is a good example of variable costing for service firms. Hotels recognize that sales from a discounted night exceed the additional variable costs of renting that room.