ECONOMICS

Detailed explanation-1: -Fixed costs include rent, mortgage, salaries, loan payments, license fees, and insurance premiums. These costs are easier to budget for when opening a restaurant because they don’t fluctuate much each month.

Detailed explanation-2: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments.

Detailed explanation-3: -If a company bills out the time of its employees, and those employees are only paid if they work billable hours, then this is a variable cost. However, if they are paid salaries (where they are paid no matter how many hours they work), then this is a fixed cost.

Detailed explanation-4: -A restaurant’s fixed costs include rent, utilities, labor, and food costs. They are only dependent on how much business the restaurant has and not how much profit it makes. Fixed costs also include any other expenses that do not change with the amount of business a restaurant does.