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.
Variable operating costs + fixed operating costs = total operating costs.
Total Costs = Fixed Cost + Variable Cost soVariable Cost = Total Costs - Fixed Cost.
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
Variable Costs and fixed costs
it is important to separate variable and fixed costs. Another reason it is important to separate these costs is because variable costs are used to determine the contribution margin, and the contribution margin is used to determine the break-even point.
Direct Cost are those costs that can be directly assigned to a production process. Indirect cost were those costs that cannot be directly assigned to production process but have to allocate to production. Variable costs are those costs that vary directly with the production level. Only Direct cost could be variable . But not all direct cost are variable. Thus direct cost contains both Variable and Fixed elements while indirect costs contains only fixed element.
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.
Direct Cost are those costs that can be directly assigned to a production process. Indirect cost were those costs that cannot be directly assigned to production process but have to allocate to production. Variable costs are those costs that vary directly with the production level. Only Direct cost could be variable . But not all direct cost are variable. Thus direct cost contains both Variable and Fixed elements while indirect costs contains only fixed element.
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)