Which of the following is an example of a fixed variable cost?
Which of the following is an example of a fixed variable cost?
What Is the Difference Between Fixed Cost and Variable Cost?
| Fixed Costs | Variable Costs | |
|---|---|---|
| Examples | Depreciation, interest paid on capital, rent, salary, property taxes, insurance premium, etc. | Commission on sales, credit card fees, wages of part-time staff, etc. |
Which of the following is an example of a fixed expense?
RENT
What is a fixed expense quizlet?
Money paid for goods and services. Fixed Expense. Expense that stays the SAME from month to month. Variable Expense. Expense that CHANGES from month to month.
What is the difference between variable and fixed expenses?
Variable costs vary 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.
What are three variable expenses?
Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs….
Is groceries a fixed expense?
Fixed expenses are your weekly, monthly, or annual bills that don’t fluctuate. These include things like mortgage or rent payments, car payments, insurance premiums, utility bills, and the average amount you spend on groceries….
What would be some examples of fixed cost and variable cost for a farm?
There are two types of costs on your farm: Variable and fixed. Variable costs are relatively straightforward and include costs such as seed, fertilizers and chemicals. Fixed costs like labor, equipment and land rent, tend to adjust more slowly….
What are examples of variable costs for a farm?
Examples of variable cost items include seed, fertilizer, lime, gasoline, diesel fuel, oil, lubricants and herbicides. These inputs can be changed during the production process to bring about changes in output. However, once a variable cost is incurred, it becomes fixed for that production period.
Is operating cost a fixed cost?
Definition: Fixed costs are those expenses that do not change regardless of the business revenue. Typically found in operating expenses such as Sales General and Administrative, SG&A. Items that are usually considered fixed costs are rent, utilities, salaries, and benefits.
Which curve is not affected by fixed cost?
Marginal cost is not affected by total fixed cost.
What is the formula for variable cost?
Total Variable Cost = Total Quantity of Output x Variable Cost Per Unit of Output.
What is variable cost curve?
TOTAL VARIABLE COST CURVE: A curve that graphically represents the relation between total variable cost incurred by a firm in the short-run production of a good or service and the quantity produced. One is to plot a schedule of numbers relating output quantity and total variable cost.
What is fixed cost curve?
TOTAL FIXED COST CURVE: A curve that graphically represents the relation between total fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. The reason for such straightforwardness is that total fixed cost is fixed. It is the same at all output levels.
How do you calculate total cost curve?
Figure 1. Average total cost (ATC) is calculated by dividing total cost by the total quantity produced. The average total cost curve is typically U-shaped. Average variable cost (AVC) is calculated by dividing variable cost by the quantity produced.
Why is long-run cost curve flat?
That is, in the long period, the total fixed costs can be varied, whereas in the short period, this amount is fixed absolutely. Thus, LAC curves are flatter than the short-run cost curves, because, in the long-run, the average fixed cost will be lower, and variable costs will not rise to sharply as in the short period.
What is short run average cost curve?
Short Run Average Costs. The normal shape for a short-run average cost curve is U-shaped with decreasing average costs at low levels of output and increasing average costs at high levels of output.
What is the relationship between short run and long run costs?
Short Run and Long Run Costs. Long run costs have no fixed factors of production, while short run costs have fixed factors and variables that impact production.
What is the difference between total cost and variable cost in the long run?
What is the difference between total cost and variable cost in the long​ run? in the long run, the total cost of production equals the variable cost of production. the level of output at which the long-run average cost of production no longer decreases with output.
What does each Sratc curve represent?
SRATC curve represents the ATC of the firm as it produces output in the short run with a fixed plant. size. As the firm increases its level of output, at some point it will need to increase its plant size….
What are the four basic cost curves?
Answer. The output is represented along OX and cost along OY; AFC curve represents average fixed cost. AVC curve represents average variable cost, ATC curve represents average total cost (i.e., total of AFC and AVC and is called AC, i.e., average cost). MC curve represents marginal cost….
How does the shape of cost curve help in decision making?
In monopolistic competition the shape of the cost curves is of no particular importance; so long as the slope of the marginal cost is smaller than the slope of the marginal revenue curve the size of the firm is determinate. Thus, the cost curves are entering into the monopolist’s price-output decisions explicitly.
What does each of the short run ATC curves represent?
The short-run ATC curves represent different scales of plant that cannot be changed in the short run. They are all above the LRAC because firms have less flexibility in the short run and costs are higher. Each tangency point is the cost-minimizing point for that level of output.