How are variable and fixed costs different from one another and how do they relate to direct and indirect costs?

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How are variable and fixed costs different from one another and how do they relate to direct and indirect costs?



Answer: A variable cost changes in total proportion to changes in the related level of total activity or volume. A fixed cost remains unchanged in total for a given time period over a relevant range of volume. A cost may be either direct and variable or direct and fixed. Another cost may either be indirect and variable or indirect and fixed.

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