A Variable Cost Percentage (VCP) is a metric that measures the ratio of variable costs to total operating expenses. It helps businesses understand what percentage of their expenses are more influenced by production level, as opposed to fixed costs. This information can be used to evaluate the cost structure of an organization, informing decisions regarding pricing and potential product mix changes. By tracking your VCP, you can gain valuable insights into your business’s internal operations and identify areas for streamlining costs or increasing profitability.