Zara fixed match 8 6

Zara fixed match 8 6

Fixed cost includes expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments, while variable costs are expenses that change directly and proportionally to the changes in business.

What this article covers: note: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks.

If you need income tax advice please contact an accountant in your area.

What Is Variable and Fixed Cost in Accounting?

Fixed costs are predetermined expenses that remain the same throughout a specific period.

These overhead costs do not vary with output or how the business is performing.

To determine your fixed costs, consider the expenses you would incur if you temporarily closed your business.

You would still continue to pay for rent, insurance and other overhead expenses.

Some examples of fixed costs include: Rent, telephone and internet costs, insurance.

Employee Salaries, loan Payments, any small business owner will have certain fixed costs regardless of whether or not there is any business activity.

Since they stay the same throughout the financial year, fixed costs are easier to budget.

They are also less controllable than variable costs because theyre not related to operations or volume.

Variable costs, however, change over a specified period and are associated directly to the business activity.

These are based on the business performance and the volume of services the business generates.
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