For example, if you are operating your business in a rented space, in that case, your rent for the space will become the fixed cost because regardless of whether you produce lots of output or no output, you will
Fixed vs variable cost refers to categorizing business expenses as either static or fluctuating during changes in production output and sales volume. Fixed costs remain the same irrespective of changes in production output, no matter what’s happening in the business. Variable expenses increase or dec...
The variable cost is defined as that component of the total cost, which increases as the firm increases its production. The fixed cost, on the other...Become a member and unlock all Study Answers Start today. Try it now Create an account Ask...
Explain the importance of distinguishing between variable and fixed costs. Are all fixed costs also sunk costs? Explain. a) Explain the concepts of fixed cost versus variable cost. Also contrast the concept of fixed cost to sunk cost. b) Explain what ...
One of the best ways to manage a fixed expense is to schedule an automatic payment to process on a recurring basis. When the size and timing of the payment is predictable, paying it manually every month takes up focus you could be using elsewhere in your budget. What are variable expenses...
Building a budget is a fundamental way to save smarter. But to do that, you need a basic understanding of fixed and variable expenses—and how they can impact your ability to stick to a budget. What is a fixed expense? Fixed expenses stay the same every month. They’re predictable and ...
The “pay yourself first” budget focuses on savings goals, but you’ll still pay fixed and variable expenses each month. To set up this type of budget, you would define your goals and how much you want to contribute toward them each month. Then budget your remaining income toward bills,...
Some operational costs are static, while others fluctuate. It’s important to know the difference between fixed and variable costs. Read more in our guide!
Part ofcreating a budgetis distinguishing between fixed and variable expenses. Fixed expenses are costs that largely remain constant, such as your monthly rent or mortgage. Variable expenses, on the other hand, are costs that may vary or be unpredictable, such as a car repair or a medical bil...
A. the variable cost of production minus the total cost of production is the fixed cost ofproduction. B. the total cost of production minus the variable cost of production is the fixed cost ofproduction. C. the total cost of production minus the variable cost of production is the marginal ...