what is the difference between a variable cost and a fixed cost?
35693
Variable costs vary based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.
132061
A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.
999086
Absorption costing allocates fixed overhead costs across all units produced for the period. Variable costing, on the other hand, lumps all fixed overhead costs together and reports the expense as one line item separate from the cost of goods sold or still available for sale.
991266
What is Variable and Fixed Cost of Goods Sold? While the vast majority of COGS expenses are variable costs, in some cases (especially for companies that are manufacturers) there is a fixed cost associated with the production of goods such as the utilities at the manufacturing plant.
1176868
Answer: Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output. Examples of variable costs include labor and the cost of raw materials, while fixed costs may include lease and rental payments, insurance, and interest payments.
739452
Variable costs, on the other hand, are dependent on production output. The variable cost of production is a constant amount per unit produced. As the volume of production and output increases, variable costs will also increase.
74041
Fixed expenses occur in predictable amounts and are usually paid in monthly intervals. Periodic expenses also occur in predictable amounts and intervals, but are much less frequent (i.e. quarterly). Variable expenses are discretionary and can be modified by your financial behavior.
1444081
Fixed and Variable Expenses Law and Legal Definition. ... Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.
62826
Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output. Examples of variable costs include labor and the cost of raw materials, while fixed costs may include lease and rental payments, insurance, and interest payments.
302094
Total cost (TC): total cost equals total fixed cost plus total variable costs (TC = TFC + TVC). Variable cost (VC): the cost paid to the variable input. Inputs include labor, capital, materials, power, land, and buildings.
477289
Depreciation is a fixed cost, because it recurs in the same amount per period throughout the useful life of an asset. Depreciation cannot be considered a variable cost, since it does not vary with activity volume.
1217611
Absorption costing includes all the costs associated with the manufacturing of a product, while variable costing only includes the variable costs directly incurred in production but not any of the fixed costs. ... Direct costs are usually associated with COGS, which affects a company's gross profit and gross profit margin.
301165
Marginal costs are a function of the total cost of production, which includes fixed and variable costs. Fixed costs of production are constant, occur regularly, and do not change in the short-term with changes in production. ... By contrast, a variable cost is one that changes based on production output and costs.
916432
Fixed costs often include rent, buildings, machinery, etc. Variable costs are costs that vary with output. Generally variable costs increase at a constant rate relative to labor and capital. Variable costs may include wages, utilities, materials used in production, etc.
149096
Absorption costing includes all the costs associated with the manufacturing of a product, while variable costing only includes the variable costs directly incurred in production but not any of the fixed costs.
433751
Based on behavior, costs are categorized as either fixed, variable or mixed. Fixed costs are constant regardless of activity level, variable costs change proportionately with output and mixed costs are a combination of both.
1152138
The main difference in a cost-plus versus a fixed price contract is the budget. Cost-plus contracts have no set spending limit, the contractor purchases the materials and receives reimbursement plus a fee. Fixed-pricing sets a specific dollar amount for a project.