If the production increases or decreases, and the prices change, those are variable costs.
Understanding Fixed CostĪ fixed cost (FC) is one that doesn’t change during operating a business when producing more or fewer products.
Keep reading our article to learn more about fixed and variable costs and how to calculate fixed expenses. Fixed costs reflect expenditures that aren’t affected by sales or production levels of the company. Companies traditionally categorized expenses as fixed, variable, and irregular. Expenses are the basis for calculating the cost and planning the price of goods or services.
