Give two differences between Fixed. Cost and Variable Cost.

1.	Give two differences between Fixed. Cost and Variable Cost.
Answer» Two differences between Fixed Cost and Variable Cost: 1. Fixed costs are those costs which remain fixed in amount irrespective of changes in the volume of output during a given period of time while variable costs are those costs which vary in amount with changes in the level of output or activity. 2. Fixed costs do not change with changes (increase or decrease) in the level of activity upto a certain limit while variable costs increase and decrease in the same proportion in which the level of output increases or decreases. Variable costs vary in total amount but remain constant per unit of production.

Answer»

Two differences between Fixed Cost and Variable Cost:

1. Fixed costs are those costs which remain fixed in amount irrespective of changes in the volume of output during a given period of time while variable costs are those costs which vary in amount with changes in the level of output or activity.

2. Fixed costs do not change with changes (increase or decrease) in the level of activity upto a certain limit while variable costs increase and decrease in the same proportion in which the level of output increases or decreases. Variable costs vary in total amount but remain constant per unit of production.

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