Types Of Costs(only fixed & variable)

Question 1

What are variable costs?

Answer 1

Costs that will increase as the firm expands. Mostly direct costs (e.g. Factory labour, raw materials)

Question 2

How long usually are fixed costs fixed for?

Answer 2

Only a short period of time. And expanding company will have greater fixed costs.

Question 3

What are fixed costs?

Answer 3

Mostly indirect costs that have to be paid even if the firm produces nothing.