Think about a bakery shop that sells a variety of breads, cookies, cakes, and pies.
Assume that they work six days a week (except Sunday) and own the building they occupy. They own all the utensils, mixing equipment, display cases, and two large gas ovens. They pay utility bills (gas and electricity), property taxes as well as income taxes, and they purchase materials (flour, eggs, etc.) from suppliers.
REQUIRED:
Which business costs do you consider to be variable?
Which business costs do you consider to be fixed?
Why is it important to understand this distinction?
Share your reasoning. Post your thoughts to the discussion thread being respectful of others in sharing your opinions.