ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Fixed expenses generally cost the same amount each month (such as rent, mortgage payments, or car payments), while variable expenses change from month to month (dining out, medical expenses, groceries, or anything you buy from a store).

Detailed explanation-2: -Variable costs are costs that change as the volume changes. Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees.

Detailed explanation-3: -Variable costs can include direct labour, ingredient/seed/feed costs, equipment repairs, fuel costs for distribution, marketing expenses and other costs. Fixed costs are consistent costs (overhead) that do not change from month to month.

Detailed explanation-4: -Variable costs are those that vary in proportion to sales volume. Food and beverage costs are the best examples of variable costs. When the volume of business increases by say 15 percent, there is normally a 15 per cent increase in food and beverage costs and vice versa.