Question:

Which of the above are Fixed and which are Variable and why is it important to understand the 2.

Widgetz Pty Ltd are considering starting production of a new product. They have estimated some of the elements of the new product and have asked for your assistance in determining the following: The following costs have been identified as being important to understand with regard to the business. They have asked for assistance in the identification of whether the costs are fixed or variable and why it is important to understand the difference between these costs. 2.1 Identify whether the costs are fixed or variable. (5) Fixed Variable Raw materials Salary of factory manager Electricity and water Factory rental Repairs and maintenance Overtime for factory workers