Business Editorial

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Known as a cost within the company the amount necessary economic to develop, manufacture or launch a particular product or providing a service. But there are different types of costs in the production process, such as fixed costs and variable costs – fixed cost variable cost.

Fixed costs and variable costs – fixed cost variable cost are economic amounts necessary for the development of a product or starting or providing a service, dependent in this case the behavior of the production process.

To understand a bit of the above as a concept of fixed and variable costs – fixed cost variable cost, understand that a fixed cost is one that remains invariant, or very little variation over time regardless of the number of products or services developed during a period of time.

However, a variable cost is one that depends directly on the amount of goods produced or services provided by the company in a given period of time. To illustrate the concept of fixed and variable costs – fixed cost variable cost, assume the following example.

A clear example to understand the fixed costs and variable costs – fixed cost variable cost may be such as fixed cost, the investment required to rent warehouses in a shoe factory, bearing in mind that regardless of the number of shoes making, should pay the same rental value, unlike for example the cost of raw materials for shoes, which depends directly on the number of shoes produced.

The identification and analysis of fixed and variable costs – fixed cost variable cost are of great importance in the cost accounting and management accounting, providing important support in decision-making, budget development, determination of equilibrium points , among many others.