Difference between Fixed and Variable Costs

Let’s take a look at some of the main differences between fixed and variable costs:

Criteria Fixed Costs Variable Costs
Meaning
A cost that stays the same, regardless of the output produced.
A cost that changes when the output changes.
Nature
Time related.
Volume related.
Incurred
Incurred irrespective of units being produced.
Incurred only when units are produced.
Unit cost
Inversely proportional to the number of units produced.
Remains the same, per unit.

Examples

Depreciation, rent, salary, insurance, tax etc.
Material consumed, wages, commission on sales, packing


When trying to determine whether a cost is fixed or variable, simply ask the following question:

Will the particular cost change if the company stopped its production activities? If the answer is no, then it is a fixed cost. If the answer is yes, then it is probably a variable cost

Opening a Bank Account

Opening a bank account is quite a simple process. Take a look at the steps to open an account of your own:

Step 1: Fill in the Account Opening Form

This form requires you to provide the following information:

Personal details (name, address, phone number, date of birth, gender, occupation, address)

Method of receiving your account statement (hard copy/email)

Details of your initial deposit (cash/cheque)

Manner of operating your account (online/mobile banking/traditional via cheque, slip books) Ensure that you sign wherever required on the form.

Types of Bank Accounts, Opening a Bank Account:

Step 1: Affix your Photograph

Stick a recent photograph of yourself in the allotted space on the form.

Step 2: Provide your Know Your Customer (KYC) Details

KYC is a process that helps banks verify the identity and address of their customers. To open an account, every individual needs to submit certain approved documents with respect to photo identity (ID) and address proof. Some Officially Valid Documents (OVDs) are:

Passport
Driving License
Voters’ Identity Card
PAN Card
UIDAI (Aadhaar) Card

Step 3: Submit All your Documents

Submit the completed Account Opening Form and KYC documents. Then wait until the forms are processed and your account has been opened!


Select the right type of account.

• Fill in complete nomination details.
• Ask about fees.
• Understand the rules.
• Check for online banking – it’s convenient!
• Keep an eye on your bank balance.


Costs: Fixed Vs. Variable: What are Fixed and Variable Costs


Fixed costs and variable costs together make up a company’s total cost. These are the two
types of costs that companies have to bear when producing goods and services.
A fixed cost does not change with the volume of goods or services a company produces. It always remains the same.
A variable cost, on the other hand, increases and decreases depending on the volume of goods and services produced. In other words, it varies with the amount produced.