Editing Variable cost (section)

==Variable costs over time==
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Over a one-day horizon, a factory's costs might largely consist of fixed costs, not variable. The company must pay for the building,  the employee benefits, and the machinery regardless of whether anything is produced that day. The main variable cost will be materials and any energy costs actually used in production. However, over a six-month horizon, the factory will be better able to change the amount of labor to fit the desired output, either by using overtime hours, laying off employees, or hiring new employees. Thus, much of their labor becomes a variable cost - though not the cost of the managers, whose salaries are paid regardless of output. 

Over a five-year horizon, all costs can become variable costs. The business can decide to shut down and sell off its buildings and equipment if long-run total cost exceeds their long-run total revenue, or to expand and increase the amount of both of them if their long-run total revenue exceeds their long-run total cost, which would include their variable costs. It can change its entire labor force, managerial as well as line workers. 

Thus, which costs are classified as variable and which as fixed depends on the time horizon, most simply classified into short run and long run, but really with an entire range of time horizons.