Fixed Costs
Fixed costs remain in TOTAL but change per unit based on the actual amount of production. Here is a video to discuss these concepts.
Examples of fixed costs include monthly rent, mortgage or car payments, employee salary, depreciation calculated under straight-line method, and insurance.
Variable Costs
Variable Costs remain the same PER UNIT but CHANGE in total. Watch this video for another explanation:
Variable costs for a manufacturer would include things like direct labor of hourly workers, other wage employees, direct materials, applied overhead, sales commissions, and depreciation under units of production method.