Fixed costs and variable costs are the two types of expenses that are dealt with in businesses. Fixed and variable costs have distinct effects on the firm, yet both are vital in keeping the business profitable. Now, you must be wondering what fixed cost and variable cost is.
A fixed cost is a financial word that refers to a cost that does not alter. It is used to represent costs that must be paid regardless of what happens in the firm. This company expenditure is time-dependent and stays constant throughout the course of a fiscal quarter. These expenses are established for a specified period of time and may have an influence on profitability, if not handled properly.