0
It can be either a fixed or a variable cost
As a fixed cost
A fixed cost is one that will not vary due to a change in production volumes or just volumes of a product in general. When electricity is charged at fixed cost for the plant or premises then it can be termed fixed cost. This is because no matter how many products you will sell or produce, the cost of electricity will not change.
As a variable cost
A variable cost is one that varies or changes with the change in production volumes or sales volumes. When electricity is charged due to the consumption then its value will change with the volumes sold or produced therefore is treated as a variable cost
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What are examples of fixed and variable cost factory?
examples of fixed cost factory are salary, rent, electricity bills while variable cost are purchase of raw materials,
Are General Expenses a fixed Cost?
Some general expenses are fixed, meaning that they are the same amount every month, but many are not. When the expense depends on usage, such as electricity, it will not be fixed, but will vary from month to month. An example of a fixed general expense would be a monthly retainer or fee paid to an accountant or lawyer. If the expense is the same amount every month, it is called a fixed cost.
When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
Is capital a fixed cost?
capital is a fixed cost
Select a cost in your industry that is a fixed cost and why is it considered to be a fixed cost?
rental
Which cost is not a fixed cost?
electricity
What is the meaning of fixed cost in economics?
the cost which is not change with production fixed cost example rent of factory , employee salaries in case of manufacturing unit , fixed electricity charge etc.
Is electricity cost a variable cost or a fixed cost?
It's a variable cost, as it changes with the change in activity level
What are examples of fixed and variable cost factory?
examples of fixed cost factory are salary, rent, electricity bills while variable cost are purchase of raw materials,
Is electricity price in Singapore fixed no matter who the retailer is?
No, the cost varies slightly according to the retailer.
How is electricity a variable cost?
Technically speaking, electricity can be either or a fixed or a variable cost... it depends on the contract you have with the power company. Some companies will charge you a fixed rate for power per month... in which case it would be a fixed cost. However, most companies will charge you per killowat used. That makes it variable, because it depends on how much power you use.
Fixed costs and variable costs in a florist shop?
a fixed cost would be electricity bills and a variable costs would be paying employees a salary not wayes !
What cost contains a combination of fixed and variable costs?
Many costs includes fixed as well as variable portion for example electricity cost in which there may be some portion of expense which remains fixed while some change due to higer or lower production.
What is the Difficulties to determined fixed cost and variable cost?
There has always been difficulties in identifying the fixes cost and variable cost for the business for almost all type of business. The cost like electricity cost,telephone cost, and fuel cost etc are the examples of the cost those add complexity in determining the fixed and variable cost. the Actual problem is that these cost occur both and at the production place and the managerial cost. For example the electricity cost increases as porpotion with the amount of the goods produced in the production plant where as it remain almost fixed in the offices.It is difficult to calculate which cost was occured at the office and on the production plant. The answe may not be satisfactory poeople can edit it.
Are General Expenses a fixed Cost?
Some general expenses are fixed, meaning that they are the same amount every month, but many are not. When the expense depends on usage, such as electricity, it will not be fixed, but will vary from month to month. An example of a fixed general expense would be a monthly retainer or fee paid to an accountant or lawyer. If the expense is the same amount every month, it is called a fixed cost.
When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
Is capital a fixed cost?
capital is a fixed cost
