What characterizes a variable expense?

A variable expense is characterized by its tendency to fluctuate based on multiple factors such as production volume, sales levels, or operational activity. This means that as the level of activity increases, the costs associated with those activities will increase as well. For example, in a business setting, costs related to raw materials or hourly wages can change depending on how much product is being produced or sold. Such expenses are flexible in nature and can vary significantly from one period to another.

In contrast, other options describe different types of expenses. Fixed expenses, for instance, remain constant regardless of business activity, while predetermined and fixed costs do not change over time. Additionally, the concept of variable expenses is not limited to new properties; instead, it applies across various operational contexts regardless of the age or status of the property.