Costs Flashcards
1
Q
what is a fixed cost?
A
Theses are expenses that do not change with the level of output
2
Q
what is a variable cost
A
these are costs that change in relation to the amount of output produced or amount sold
3
Q
examples of variable cost
A
raw materials used in production, employee wages when they are paid on what they produce, energy used in production process
4
Q
examples of fixed cost
A
salaries of employees and managers, insurance, advertising/promotional campaigns, rent and business rates on factory and office premises
