Question: I am struggling to understand the difference in fixed, variable and mixed costs. I connect fixed costs to concepts such as rent and variable costs
I am struggling to understand the difference in fixed, variable and mixed costs. I connect fixed costs to concepts such as rent and variable costs to something like materials for a product. I understand at that level. However if I consider terms like income before tax, income from continuing operations. net income or gross profit, I am stumped. My thought process is that variable costs would include revenue and operating expenses, fixed costs would include income tax expense and income before tax. Mixed would include cost of goods sold, revenue and selling and administrative expenses, EBITDA. Am I on the right path or did I fall down a rabbit hole?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
