Question

Do you spend more time controlling fixed cost or variable cost

Answer 1

We Spend more time on controlling the variable cost and not the fixed cost, the reasons are as follows:

A fixed cost is an expense or cost that does not change with an increase or decrease in the number of goods or services produced or sold. Fixed expenses are well fixed. They are the same every month. Fixed expenses must be paid every month irrespective of business activities.

Variable costs increase or decrease depending on a company's production volume. They are directly related to business activity, such as raw materials and inventory.

Hence it is important to spend more time on controlling variable costs like advertising and employee salaries first before targeting fixed costs like the rent and insurance. Controlling fixed cost can cause more financial and operational damage than cutting your variable costs.