Fixed vs Variable Costs: What's the Difference?
If the cost does not change when output changes it is fixed; if the total rises and falls with output it is variable.
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1.What question sorts a cost into fixed or variable?
If the cost does not change when output changes it is fixed; if the total rises and falls with output it is variable.
2.Is Marge's monthly shop rent a fixed or a variable cost?
Whether she bakes 500 loaves or 2,000, the rent stays the same.
3.Ink costs 15 cents per shirt. What happens from 2,000 to 4,000 shirts?
Ink costs 300 for 2,000 shirts and 600 for 4,000; the total doubles but per shirt it is still 15 cents.
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Sources (3)
- 2.2 Identify and Apply Basic Cost Behavior Patterns (Principles of Accounting, Volume 2: Managerial Accounting) (OpenStax, Rice University)
- Ch. 7 Key Concepts and Summary (Cost and Industry Structure), Principles of Economics 3e (OpenStax, Rice University)
- Eigene Rechnung: synthetisches Kostenbeispiel (Miras Baeckerei, Fix
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