Question
Hi, I need in few words a substantive comment on this post: Hello Class, Rent, salary, insurance, and property taxes are examples of fixed costs
Hi, I need in few words a substantive comment on this post:
Hello Class, Rent, salary, insurance, and property taxes are examples of fixed costs that remain consistent with the volume of output or sales. Regardless of the volume of output or the amount of sales money, these costs never change. On the other hand, variable costs are expenses that change according to the volume of sales or the rate of production. Raw materials, direct labor costs, and sales commissions are a few examples of variable costs. Variable costs rise with an increase in output or sales and fall with an increase in either. Variable costs are budget-able for businesses. However, as it can be difficult to predict variable expenses with accuracy, it may be more difficult than budgeting for fixed expenditures. Businesses can calculate variable costs for a specific production or sales volume using historical data and sales projections. They can also make plans for various levels of output or sales and manage variable costs by using tools like cost-volume-profit analysis. Thank You
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