0
What are the important differences between fixed cost and variable costs?
Wiki User
∙ 13y ago
Fixed costs are costs that do not change in total as the number of units increase or decrease. Examples include rent and utilities expense, manager salaries, etc. However, since the total cost does not change, the individual unit cost does change as units increase or decrease.
Variable costs are costs that change in total as the number of units increase or decrease. An example might be direct labor, which increases based on number of hours work. However, total unit cost does not change.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What things do variable costs include?
Variable costs vary depending on a company's production. Production, or output, and costs are included in variable costs. Production and costs are directly related.
Are selling costs variable costs?
If selling costs varies with production level then selling costs are variable costs but if they remain fix then these are fixed costs.
What is the importance of fixed costs versus variable costs in making a business profitable?
The importance of knowing which costs are fixed and which costs are very important in making a business profitable. In order to budget effectively, one needs to know costs that will always be the same (fixed) and the ones that sometimes change (variable).
Difference between semi variable costs and semi fixed costs?
a semi fixed cost moves upward in a step where semi variable cost begining at a given base level
Is A differential cost a variable cost?
No they are not the same things. Differential costs are ones that differ between different alternatives. Differential costs are used interchangeably with the terms avoidable, incremental, and relevant costs. However, variable costs are simply ones that vary with different activity levels. They do not necessarily differ between alternatives.
Why is it important to separate variable 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.
What is the difference between average total costs and average variable costs?
Average total cost is the average of all your costs. This is your Fixed Costs and your Variable costs. Average Variable Cost is the average of your costs that can fluctuate.
Is variable cost a relevant cost?
No. If a variable cost does not differ between alternatives than it is irrelevant.
What is the difference between base cost and variable cost?
You don't fire variable costs
What is cost What is the difference between total cost and average cost?
Average total cost is the average of all your costs. This is your Fixed Costs and your Variable costs. Average Variable Cost is the average of your costs that can fluctuate.
What is the difference between start up costs and variable costs?
shut up u neek
Are Fixed costs are the difference between total costs and average variable costs?
No. But: ATC = AVC + AFC Or TC = VC + FC
Do Variable costs and differential costs mean the same thing?
No they are not the same things. Differential costs are ones that differ between different alternatives. Differential costs are used interchangeably with the terms avoidable, incremental, and relevant costs. However, variable costs are simply ones that vary with different activity levels. They do not necessarily differ between alternatives.
Are variable costs included in operating costs?
Variable operating costs + fixed operating costs = total operating costs.
What things do variable costs include?
Variable costs vary depending on a company's production. Production, or output, and costs are included in variable costs. Production and costs are directly related.
What is the connection between marginal returns and variable costs?
they are usually inversly proportional
Are selling costs variable costs?
If selling costs varies with production level then selling costs are variable costs but if they remain fix then these are fixed costs.
