Fixed and Variable Costs

Question 1

What are fixed costs

Answer 1

Business expenses that do not change

Question 2

What does fixed costs mean for a business

Answer 2

It keeps the business functioning without having an impact on production levels since the expenses stays the same

Question 3

What are variable costs

Answer 3

Expenses that change based on how much a business sells and produces

Question 4

Examples of variable costs

Answer 4

RAW MATERIALS

PACKAGING

UTILITIES

Question 5

What is the formula for total costs

Answer 5

FIXED COSTS + VARIABLE COSTS