Fixed and Variable costs

What are fixed expenses?

• Irregular expenses that change from week to week or month to month

• The amount of money in your bank account

• The amount of cash in your purse or wallet

• Expenses that stay the same from week to week or month to month

What are variable expenses?

• Irregular expenses that change from week to week or month to month

• The amount of money in your bank account

• Costs that do not fluctuate from week to week or month to month

• The amount of cash in your purse/wallet

A loan payment is a fixed expense.

• True

• False

Dara makes bracelets and sells them in her shop. Which is a fixed expense for Dara’s business?

• the cost of the beads

• the cost of the string

• the cost of advertising

• rent for her shop

Rent Payment

• Fixed Expense
• Variable Expense

What is a cost?

• Something the company receives

• The price of a product

• Something the company must pay

• Something the company sells

Which 3 of these are costs?

• Fixed

• Variable

• Average

• Revenue

What is a variable cost?

• A cost which does not change

• A cost which they must pay even if they produce nothing

• A cost which changes the more or less the business produces

• A cost the business pays when they start

If Sam's Sandwiches use 25p of material for each sandwich, what will be their variable costs for 10 sandwiches

• 10 x 0.25 = £2.50

• 2.5 x 10 = £25

• 25 x 10 = £250

• 0.25/10 = 2.5p

Costs that must be paid regardless of how much of a good or service is produced. They do not change in the short term, regardless of output are called

• Variable costs

• Fixed costs

• Total costs

• The costs