Reporting

    Fixed vs. Variable Costs

    Definition

    Fixed costs don't change with sales volume (rent, salaries); variable costs scale with volume (materials, sales commissions).

    Why it matters

    Understanding the split is foundational for break-even analysis, pricing strategy, and stress-testing what happens to profit if revenue drops 20%.

    Back to glossary

    Want this kind of clarity in your finance function?

    Schedule a free Financial Alignment Call to discuss how outsourced bookkeeping, controller oversight, or fractional CFO support can fit your business.

    Schedule a Call