Question

Differentiate between Fixed Costs and Variable Costs.

Answer 1

Answer:

Hello mate

Explanation:

Fixed Cost

1.Meaning:-In accounting, fixed costs are expenses that remain constant for a period of time irrespective of the level of outputs

2.Incurred when:-Even if the output is nil, fixed costs are incurred.

3.Also known as:- Fixed costs are also known as overhead costs, period costs or supplementary costs.

4.Nature:-Fixed costs are time-related i.e. they remain constant for a period of time.

5.Example:-Depreciation, interest paid on capital, rent, salary, property taxes, insurance premium, etc.

Variable Cost

1.Meaning:-Variable costs are expenses that change directly and proportionally to the changes in business activity level or volume.

2.Incurred when:- The cost increases/decreases based on the

3.Also known as:- Variable costs are also referred to as prime costs or direct costs as it directly affects the output levels

4.Nature:-Variable costs are volume-related and change with the changes in output level.

5.Example:-Commission on sales, credit card fees, wages of part-time staff, etc.

$hope \: it \: help \: uh$

✌️✌️✌️♥️♥️♥️

mark me as brainliest

Answer 2

Fixed costs are the cost that remains constant for the time whereas variable costs are a cost that changes with the level of business.

What is the difference between fixed costs and variable costs?

• Fixed costs depend on time whereas variable costs depend upon volumes
• When the number of production increases then fixed costs decrease whereas variable costs remain constant
• In fixed costs, when the costs are decreased and profits are increased then the level of production is high whereas, in the variable costs there is no impact on the level of production