Increasing shipping and handling fees from a supplier as your orders grow are considered ____________.

Shipping and handling fees that fluctuate based on the size of your orders fall under the category of variable costs. These costs are directly tied to the volume of goods ordered; as order quantities increase, the shipping and handling fees typically rise as well. This characteristic of variable costs is crucial for managing a small business’s finances, as it allows owners to forecast costs based on expected sales or production levels.

In contrast, carrying costs involve expenses associated with storing unsold goods, such as warehousing and insurance, which do not directly change with shipping amounts. Fixed costs are those that remain constant regardless of the level of production or sales, like rent or salaries, while order costs encompass expenses related to placing and processing orders but are not directly linked to the variable nature of shipping fees. This understanding helps in making informed financial decisions and ensuring proper budgeting for business operations.