what is fixed cost and variable cost.?

Answer 1

A fixed cost is a cost that a business will incur, regardless of the level of sales or production. Some examples of this are officers salaries, rent, insurance expense, etc. A variable expense will change in relationship to sales or production. For example, you would need to buy more steel if your production goes up, or your sales or production salaries might increase based on sales or production.

Hope that helps!

Answer 2

good question. a fixed cost is something you have to pay month after month, like the rent or the mortgage payment. a variable cost changes, like electricity or heating oil -- these change based upon how much you use.

in a business, salaries and taxes are generally considered to be fixed costs. overtime, on the other hand, is a variable cost.

fixed costs are pretty predictable and easier controlled than variable costs.

good luck!

Answer 3

Fixed cost are recurring expense amounts. Like, rent/leasing should be the same every month. Car payments are fixed cost, etc. A variable cost is going to, well, vary. They are expenses that are mostly based on usage. Your electricity bill is a variable cost. I obviously am using simplistic examples, but the application "should" be universal.

Answer 4

Fixed cost - Cost which are generally attributed to fixed factors of production are called fixed cost. These are the costs which do not change with the change in the size of output/ production during short period.
Variable Cost - The cost which vary or change with change in the size of output/ production are called Variable cost. These are attributable to the use of variable inputs. Such costs increase when output/ production increase and decrease when output/ production falls.

Answer 5

Fixed cost means cost which remains the same regardless of the change in Profits, Sales etc...The perfect example would be Salaries, Rent,etc

Variabe cost maens cost which increases or Decreases according to the Production Level or the Profit margin.
Simple Example would be that of Wages..
Incase a Company wants to increase production it might hire more wage employees while in case of losses it may reduce labourers

Answer 6

"Fixed cost" are those costs that don't change, no matter how many things you make for sale. Variable costs are those that do change dependant on the amount of stuff you make for sale. For example, The rent for your restauarnt stays the same no matter how many pancakes you make, but the cost of the batter you use to make your pancakes depends on how many pancakess you make. Rent cost is fixed, batter cost is variable.

Answer 7

Wife is a fixed cost...can't be changed and Girl Friends are variable cost..more you spend more u get...:)-

Answer 8

Examples of fixed costs/expenses are employee wages, rental payments under a leasing agreement. Example of a variable expense is say your telephone bill, business premises water bill etc.

Answer 9

Fixed costs are those which are paid for execution of particular duty or responsibility as per terms and conditions on or before time. For example Wages, Salaries etc. It doesn't vary from day to day / Month to month.

Variable costs are those which are paid for execution of a particular duty or responsibility above the level of expectation of your superior. For example : Incentives etc. It varies from time to time, day to day and month to month.

Answer 10

fixed cost is fixed wheather production is zero or more. variable cost increase as and when prodection increase