Magna International deals in the automobile industry and therefore raw material is the main cost driver that is purely variable in nature. There are mainly four cost components that are applied in the manufacturing and sales of an automobile, namely, raw material, labor cost, advertising, and research and development. Apart from these costs, there are so many costs that have direct as well as indirect on the automobile cost structure. On an average, raw material used in the automobile contributes about 47 % of the total cost to good sold. Therefore, it can be said that more than 50% of the cost applied by Magna International are variable in nature. Automobile sector is critically dependent on the supply of labor and there is huge demand of labor in this industry(Investors relation, 2016). As mention before, Magna employees more than147,000 employees in all the centers located in various countries. Labor cost highly varies country to country. Labor cost means cost incurred in manufacturing the automobiles, its research and development cost, administration cost of company and other management cost. Among these labor costs, manufacturing labor cost is variable i.e. it depends on the capacity of the manufacturing unit. Labor costs excluding the manufacturing labor cost are fixed in nature or it can be said that it depends on the type of employment. Research and development cost, tentative cost or cost incurred to give a company a technology advancement to lead the industry (Investing in the automotive industry – what you need to know, 2016). Therefore, this cost can be termed either sunk cost or irrelevant cost. Advertising cost incurred by the Magna International is fixed in nature and it does not depend on the number of units manufactured and sold in the year.