Tubetotext

    Managerial Accounting: Fixed and Variable Costs

    Fixed Costs

    Fixed costs are costs that remain unchanged in total as the activity base changes, but change per unit.

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    Variable Costs

    Variable costs are costs that will vary in total in proportion to the activity base, but remain fixed per unit.

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    Example of Fixed and Variable Costs

    The presenter provides an example of a car payment, which is a fixed cost, and maintenance costs, which are variable costs.

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