Variable cost is a billing concept that means the customer pays only for the resources they consume, and the cost varies depending on the usage. This is different from fixed cost, which means the customer pays a predetermined amount regardless of the usage. IaaS-based setups typically use variable cost billing, as the customer can provision and deprovision resources on demand, and only pay for what they use. This allows the customer to optimize their costs and scale their resources according to their needs123. Reference: [CompTIA Cloud Essentials+ Certification Study Guide, Second Edition (Exam CLO-002)], Chapter 1: Cloud Principles and Design, pages 17-18.