Class, there are about 30 million businesses in the United States. Of which more than 25 million are small businesses. All businesses are profit maximizers. Profit = Total Revenue - Total Cost. As you can see, cost is a major component firms consider in maximizing their profit. Costs are divided in to two parts: FIXED COSTS and VARIABLE COSTS. To start with, what is your understanding of ACCOUNTING COST, ECONOMIC COST, FIXED COST, VARIABLE COST? Please provide examples. Why is it important for a business to identify its cost as fixed or variable?