Variable Costs vs.

Fixed Costs
In economics, variable costs and fixed costs are the two main types of costs that a
corporation incurs when producing goods and services, according to S. Nickolas (2021).
Fixed costs stay constant regardless of how much a company produces, while variable
costs change with the quantity of output produced.

The costs of a company's variable costs are those that are linked to the number of
goods or services it produces. Variable expenses rise and fall in tandem with a
company's output output. Variable expenses will rise as production volume increases.
The variable expenses, on the other hand, will decrease when the volume decreases. In
general, different industries have varied levels of variable costs. As a result, comparing
the variable costs of a car manufacturer and an appliance manufacturer, for example, is
pointless because their product outputs are not comparable. As a result, comparing the
variable costs of two businesses in the same industry, such as two automobile
manufacturers, is preferable.

You may calculate variable costs by multiplying the quantity of output by the variable
cost per unit of output. This calculation is simple and does not take into account any
other costs such as labor or raw materials.

Fixed costs, unlike variable costs, do not change with the volume of output. Whether or
not goods or services are produced, fixed expenses remain constant. As a result, a
business cannot avoid fixed costs. Lease and rent payments, utilities, insurance, certain
salaries, and interest payments are all examples of fixed costs.

Reference: https://www.investopedia.com/ask/answers/032515/what-difference-
between-variable-cost-and-fixed-cost-economics.asp