This includes the cost of the sales commissions as well as the cost of the salaried marketing staff's time to produce the brochure. The cost of the brochure is not directly dependent on sales, making it a fixed cost. This calculation also does not take into consideration the marketing manager's incentive, which is tied to sales and so is a variable marketing cost.
This includes the sales commissions and the marketing manager's incentive expenses, which are both variable marketing costs since they are tied directly to sales. However, it also includes the cost of the marketing staff in producing the brochure. The cost to produce the brochure will not change based on the sales volume. Therefore, it is not a variable marketing cost.
This is the cost of the sales commissions, which are a variable marketing cost. However, the sales commissions are not the only variable marketing cost. The marketing manager's incentive is also tied to sales performance and will therefore vary with the sales volume.
Variable marketing costs are costs which are the same per unit sold and which vary in total with sales volume. The only variable marketing costs are the sales commissions and the marketing manager's incentive. Based on projected sales of $100,000, sales commissions are .08 × $100,000, or $8,000. The marketing manager's incentive is .005 × $100,000, or $500 based on the projected sales. Since both these costs will vary with sales volume, they are both variable costs. Total variable marketing costs for the new product are thus $8,500. The other costs are all fixed costs.
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