Give two examples of Variable Cost and Fixed Cost.
Answers
Answer:
variable cost:
1.Credit card fees.
2.Billable staff wages.
fixed cost:
1.Amortization
2.Interest expense
Explanation:
variable cost:
1. Fees are only charged to a business if it accepts credit card purchases from customers. Only the credit card fees that are a percentage of sales (i.e., not the monthly fixed fee) should be considered variable.
2. If a company bills out the time of its employees, and those employees are only paid if they work billable hours, then this is a variable cost. However, if they are paid salaries (where they are paid no matter how many hours they work), then this is a fixed cost.
fixed cost:
1. This is the gradual charging to expense of the cost of an intangible asset (such as a purchased patent) over the useful life of the asset.
2.This is the cost of funds loaned to a business by a lender. This is only a fixed cost if a fixed interest rate was incorporated into the loan agreement.
Answer:
Explanation:
Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output. Examples of variable costs include labor and the cost of raw materials, while fixed costs may include lease and rental payments, insurance, and interest payments.