Posted by vdan on Friday, November 16, 2007 at 7:44pm.
Variable costs change based on how much of a product you produce. For example, if you're in the straw business, plastic would be a variable cost. If you make 100 million straws, you use more plastic than if you make just 50 million.
Fixed costs don't ever change based on how much you produce. This would be stuff like insurance, overhead, and utilities.
That should put you in the right direction. If you wish, we can critique your thinking on the above problem.
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