Fixed and Variable Costs Essay Example | Topics and Well Written Essays - 500 words

Fixed and Variable Costs - Essay ExampleExamples of semi variable star costs include electricity expense, telephone expense. In one broad category of Over head expenses, these costs are collectively shown for example disparagement of machinery as well as the heating and lighting cost. Electricity cost is a semi-variable cost because there is a fixed charge and then on any unit we use we are charged an additional amount. So this additional amount is the variable cost and the fixed charge is the fixed cost. semitrailer variable cost stays constant for a certain time period and then it goes to a higher cost at a particular proposition increased wad (Leslie 1993).For compend purpose, the fixed part is separated from the variable part and both are written separately so that proper analysis can be done and so the club should know as to how much is their fixed cost and how much is variable.2. A companys break-even point is its sales volume at which its total costs equal its total revenu es. This means that at the break-even point, the company is making neither any profit nor any loss. If a company is operating below its break-even point it would not be able to exist in the long run as its costs (fixed and variable) would not be cover by the revenues (Susan 2008) .