Distinguish between the fixed cost and variable cost?

Question

Answer

fixed cost- cost occurs because of  fixed factors like rent of building , salary etc ..it cannot be changed in short period of time.variable cost occurs because of variable factors like wages of workers etc. it can be changed in short period of time.

Answer

Fixed cost: remains fixed even with more or less or nill usage of resources. Ex: Taxes, depreciation(in few cases), Fixed electricity charges, fixedline bills etc.Variable cost: Directly related to variable factors invloved in production process, and changes with change in output (upward or downward). Ex: Cost of inventories purchased, Fuel and variable part of electricity, wages etc. Note: wages are paid to those persons who directly contribute for production, they can be daily wagers like coolie. salaries are paid to those other than aforementioned.

Answer

fixed costs are those cost which used for fixed factor like fixed factors

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