What are fixed costs and variable costs with examples
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Fixed costs often include rent, buildings, machinery, etc. Variable costs are costs that vary with output. Generally variable costs increase at a constant rate relative to labor and capital. Variable costs may include wages, utilities, materials used in production, etc.
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Heya. user!
Fixed cost are the cost related to the use of fixed factor of production.
Example>
expenditure on machine and plant .
expenditure on land and building .
variable cost are expenditure incurred by the producer on the use of variable factor of production .
Example>
cost of raw material .
wages of casual worker .
expense on electricity .
Fixed cost are the cost related to the use of fixed factor of production.
Example>
expenditure on machine and plant .
expenditure on land and building .
variable cost are expenditure incurred by the producer on the use of variable factor of production .
Example>
cost of raw material .
wages of casual worker .
expense on electricity .
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