Managing Labor Costs

Variable Labor Costs

Variable costs must also be accounted for. Variable costs are costs that change based on the volume of the business. Food costs are the most obvious example of variable costs. Provided that the restaurant has not overstocked food, food costs will increase in a direct correlation with the volume of business. Labor hours above the salaried staffing levels are also variable costs. As the volume of business increases, hourly labor costs will increase proportionately.