Fixed costs and Variable costs

1. Fixed Costs
 Fixed costs are those that remain constant regardless of changes in and volume
of output
 Examples are rent, administrative costs, and taxes.
 It is expressed as FC.

2. Variable Costs
 Variable costs are those that change with changes in output
 Examples are raw materials, labor, rate per unit, sales commission, freight, and
cost of transportation.
 It is expressed as VC.