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3 cards from this section. Quick, good the night before a test.
Define fixed costs and give one example.
Think about costs that remain constant every month.
What are variable costs? Provide one example.
Consider costs that vary with how much you produce.
What type of cost remains unchanged in the short term?
Think about costs that don't change with how much output you have.
Do variable costs increase or decrease when production rises?
Consider what happens each time you make another unit.
A company produces 1000 units at a total variable cost of ₹30,000 and has fixed costs of ₹20,000. If production increases to 1500 units, what will be the total cost?
First, find the variable cost per unit, then apply it to the new production level.
If a business has total costs of ₹50,000, consisting of fixed costs of ₹20,000 and variable costs, how would you calculate the variable costs given a production level of 400 units?
Think about isolating variable costs from total costs.
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