Costs (Types)
**Fixed costs:** unchanged by activity (rent, salaries, insurance). **Variable costs:** change with activity (materials,...
Real World
McDonald's pays fixed rent on its restaurants whether it serves 100 or 1,000 customers a day, but its variable costs — beef, buns, packaging — rise with every burger sold.
Exam Focus
Always classify costs correctly first; misidentifying semi-variable as fixed/variable loses marks on break-even questions.
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