Fixed cost or variable cost?

1
Fixed cost or variable cost?
Production costs are made up of two elements -
fixed costs and variable costs.. Fixed costs are
those that are incurred whether the company
produces 1 tonne or ten thousand tonnes. Variable
costs relate directly to how much product is made
.
Fixed Costs
Variable Costs

• Cost of plant and buildings

• Cost of raw materials.

• Cost of energy associated with production.

• Research and development costs.

• Land purchase or land rental.

• Cost of waste treatment.

• Costs associated with plant depreciation.

• Distribution costs.

• Labour costs

Cost of plant and buildings
Cost of raw materials.
Cost of energy associated with production.
Cost of waste treatment.
Research and development costs.
Labour costs
Land purchase or land rental.
Distribution costs.
Costs associated with plant depreciation.