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Answer» Difference between fixed cost and variable cost. | Sl. No. | Fixed Cost | Variable Cost | | i | The amount of money spent on fixed factors of production is called fixed cost. | The amount of money spent on variable factors of production is called variable cost. | | ii | Fixed cost does not change with change in level of output. | Variable cost changes with change in the level of output. | | ii | Fixed cost can never be zero even when production is stopped. | Variable cost is zero when production is stopped | | iv | E.g.:- Rent of building, salaries of permanent employees etc. | E.g.:-Cost of raw material, wages of temporary labour etc. |
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