Fixed and variable costs 08:27 Mar 3, 2011
Apologies if you already knew this...
Fixed costs are that part of an expense that only occurs once and is the same no matter how many units you produce. Mainly the cost of equipment, a building to put it in, installation etc.
Variable costs are those that occur per unit produced - things like raw materials, electricity to run the machine etc.
To use a car analogy - buying the car and paying the insurance are fixed costs. You have to pay them even if the car sits in the garage and you never go anywhere. Fuel and servicing are variable costs - they depend on how much you drive. | 
The translation workplace 
peer agreement (net): +1
