Fixed costs are expenses that do not change with the level of output or activity. They are incurred regardless of whether a business is producing any goods or services. Examples include rent, salaries, and insurance. Variable costs, on the other hand, change directly with the level of output or activity. They increase as more goods or services are produced and decrease when less is produced. Examples include raw materials, direct labor costs, and sales commissions.
How can you make every idea count and have every problem efficiently solved? Our McKinsey MECE Princ...
Download template