ECONOMICS

Detailed explanation-1: -What Is a Fixed Cost? Fixed cost refers to the cost of a business expense that doesn’t change even with an increase or decrease in the number of goods and services produced or sold. Fixed costs are commonly related to recurring expenses not directly related to production, such as rent, interest payments, and insurance.

Detailed explanation-2: -A fixed cost is a cost that remains constant; it does not change with the output level of goods and services.

Detailed explanation-3: -A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease depending on a company’s production or sales volume-they rise as production increases and fall as production decreases.

Detailed explanation-4: -Variable costs change based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.

Detailed explanation-5: -The fixed cost refers to a cost that doesn’t change regardless of the production output. In contrast, a variable cost is one that depends solely on the level of output. A semi-variable cost therefore combines the features of a fixed cost and a variable cost.