What is difference between fixed cost and variable cost?

Fast Fact: Fixed costs (rent, equipment leases) don’t budge; variable costs (materials, hourly wages) swing with production. Key for profit math!

Fixed vs. Variable Costs: The Money Breakdown Running a business or studying econ? Knowing fixed costs vs. variable costs is key to budgeting. Here’s the deal: - Fixed Costs: Expenses that don’t change with production/sales volume. Think rent, salaries, insurance, or loan payments. Example: Your shop’s rent is Rs 20,000/month, whether you sell 10 or 1,000 items. - Variable Costs: Costs that fluctuate with output. Think raw materials, labor wages (if hourly), packaging, or shipping. Example: Making 100 cakes costs Rs 5,000 for ingredients; 200 cakes, Rs 10,000. Key Difference: Fixed costs are constant (time-based); variable costs scale with activity. In my cafe, rent’s fixed, but coffee beans are variable. Impacts pricing—high fixed costs mean you need steady sales. Investopedia’s guide nails it. Got a biz idea? Share it!

Fixed costs = same no matter what (rent, salaries). Variable costs = change with output (materials, shipping). Simple!

Digging into Cost Dynamics From my accounting classes: - Fixed Costs: Stay flat—like depreciation, rent, or internet bills. Rs 10,000/month for a factory lease, regardless of 0 or 1,000 units. - Variable Costs: Rise/fall with production—raw materials, piece-rate labor, fuel. Rs 50/unit for packaging means 100 units = Rs 5,000. - Impact: Fixed costs hit profits hard at low output; variables bite when scaling. Mixed costs (e.g., utilities) blend both. My startup’s fixed costs killed margins early—learned fast! The Balance’s examples clarify. Planning a budget?