Fixed costs pertain to expenditures (bills) that you have to pay regardless as to how well your business is doing. Taxes, utilities, maintenance and such.
Variable costs change depending on your circumstances. If your sales of a given product increase, you will need to spend more in acquiring the materials needful to make that product, or hire additional workers to make it, and such like that.
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.
There are variable and fixed costs. Businesses can manipulate the variable costs, but they cannot change their fixed costs in business.
Type your answer here... fixed cost + variable cost = total cost
The three types of cost you are referring to are Fixed, Semi Variable and Variable Costs. On a well though out COA the janitorial costs would fall under administrative costs. Thus fixed.
Fixed Costs: Salaries Variable Costs: Medicines, ambulance fuel, paper, "CEO & friends"benefits package.
Variable operating costs + fixed operating costs = total operating costs.
Total cost is determined by adding fixed costs and variable costs together. fixed cost + variable cost = total cost
a fixed cost would be electricity bills and a variable costs would be paying employees a salary not wayes !
An example of semi variable direct costs is wages. Since semi variable costs are partially fixed and variable, regular labor is fixed costs, as production rises and workers have overtime the overtime is considered the variable cost.
They are costs that involve an element of both fixed and variable costs eg a telephone bill involves line rental (fixed) plus cost for calls made (variable)
Total Costs = Fixed Cost + Variable Cost soVariable Cost = Total Costs - Fixed Cost.
They are costs that involve an element of both fixed and variable costs eg a telephone bill involves line rental (fixed) plus cost for calls made (variable)