It's a variable cost, as it changes with the change in activity level
Fixed Cost - costs that do not vary with the quantity of output produced.The best example I can think of is when making Chocolate Chip Cookies. You need ingredients and supplies to make them:Chocolate Chips (Variable Cost)Flour (Variable Cost)Butter (Variable Cost)Sugar (Variable Cost)Eggs (Variable Cost)Vanilla (Variable Cost)Baking Soda (Variable Cost)Salt (Variable Cost)Bowls (Fixed Cost)Spatulas (Fixed Cost)Oven (Fixed Cost) The gas or electricity would be a variable costBaking Sheet (Fixed Cost)Cooking Rack (Fixed Cost)Mixer (Fixed Cost)Fixed Costs do not vary with Quantity. Variable Costs do vary with Quantity.
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.
fixed and variable
If salary is on per lecture basis then it is variable cost otherwise it is fixed cost.
Total Costs = Fixed Cost + Variable Cost soVariable Cost = Total Costs - Fixed Cost.
It can be either a fixed or a variable costAs a fixed costA 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 costA 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
examples of fixed cost factory are salary, rent, electricity bills while variable cost are purchase of raw materials,
a fixed cost would be electricity bills and a variable costs would be paying employees a salary not wayes !
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 cost and variable cost is equal to total cost as per following formula: Total Cost = Fixed Cost + Variable Cost
its a fixed cost
If electricity expense is dependant on production level then it is variable expenses other wise some of expenses may be of variable nature while some part is fixed or semi variable nature as well.
Fixed Cost - costs that do not vary with the quantity of output produced.The best example I can think of is when making Chocolate Chip Cookies. You need ingredients and supplies to make them:Chocolate Chips (Variable Cost)Flour (Variable Cost)Butter (Variable Cost)Sugar (Variable Cost)Eggs (Variable Cost)Vanilla (Variable Cost)Baking Soda (Variable Cost)Salt (Variable Cost)Bowls (Fixed Cost)Spatulas (Fixed Cost)Oven (Fixed Cost) The gas or electricity would be a variable costBaking Sheet (Fixed Cost)Cooking Rack (Fixed Cost)Mixer (Fixed Cost)Fixed Costs do not vary with Quantity. Variable Costs do vary with Quantity.
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.
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.
fixed and variable
variable