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Since the final product is the value added drapery, raw cloth is evidently an input. Further, it is clearly a variable input as its quantity utilized is derived from production targets. Simply, the cloth used in production will be treated as a variable cost. The fixed costs for this business would be those related to the plant and machinery used in the process, the factory overhead cost allocation and other cost of this nature, that are fixed regardless of the production level. All costs that vary with the production level will be variable costs. Sabdezar Ilahi
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∙ 16y ago
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Is maintenance on production equipment a fixed variable or mixed cost?
fixed and variable
What causes average fixed cost to decline?
The average fixed cost curve is negatively sloped. Average fixed cost is relatively high at small quantities of output, then declines as production increases. The more production increases, the more average fixed cost declines. The reason behind this perpetual decline is that a given FIXED cost is spread over an increasingly larger quantity of output.
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.
At zero production what are variable costs?
At zero production variable cost will be zero because variable cost is the cost occured for producing a product but their will be some fixed cost.
What does total cost of production include?
Variable Costs and fixed costs
Is fixed cost the same as indirect cost?
NO both are not same as fixed cost is cost which remains fixed with change in production level while indirect cost is that cost which is not directly related for the production of units.
Is depreciation fixed cost?
Yes depreciation is fixed cost because it do not vary with the volume of production and remained fixed whether any production or not.
What determines the difference between a variable and a fixed cost?
The relataionship of cost between the level of production is determine the fixed or variable cost if cost change with production level then it is variable cost otherwise fixed cost.
What cost is not a fixed cost?
A cost which varies with the level of production activity is not a fixed cost and called variable cost.
Is sales promotion cost a variable cost?
If it varies with the level of production then it is variable cost otherwise it is fixed cost.
How do fixed cost different from variable cost?
Variable costs are different in this sense that fixed cost remains fixed and it has no impact of change in production level while variable cost changes with the change in production level.
Is the fixeds selling cost is fixed cost?
Selling cost which remains fixed and don't have any impact on production level is called fixed cost.
Production cost is which kind of cost variable or fixed cost?
variable
Is maintenance on production equipment a fixed variable or mixed cost?
fixed and variable
What is fixed cost variable cost and mixed cost in truck?
Fixed cost is that cost which remains fixed and don't change with change in production level. Variable cost is that cost which varies with change in production level. Mixed cost is that cost which have both the elements, some portion of fixed cost while some portion is variable 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 tax a fixed cost?
Yes because the cost does not change with the amount of production.
