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hey there students so in this video today were going to go over fixed costs now earlier we talked about variable costs materials labor variable overhead now remember with variable costs when you produce more cars your total variable cost goes up its a little different with fixed costs so to give you a brief example here lets say you produce more cars but what happens with fixed costs fixed costs dont change so the more cars you produce that fixed cost in total will just stay the same so some examples here would be equipment insurance rent managers salary right because the more you produce these costs dont really change right you can produce a thousand cars but youre still paying that manager the same salary right thats a fixed cost it doesnt change in total now oh also factory depreciation usually depreciation stays the same each month no matter how many cars you produce so lets talk about something here this is called relevant range now this concept will be revisited later
