3.1 Cost of producing the product - Word Drop

Costs are grouped into two types. Fixed costs do not change with the number of items sold, even when sales are zero, and include rent and advertising. Costs that do change with the number of items produced are ______ costs.

Core staff on yearly contracts receive ______, which are fixed costs because they must be paid whatever the output. Workers paid by the hour earn ______, a variable cost that rises as output increases. Raw materials and packaging are variable costs too. ______ such as gas, electricity and water are treated as fixed costs for this qualification.

Loan ______ is the percentage charged on money borrowed, and it is a fixed cost. The loan ______, which pay back the amount borrowed, are not a fixed cost.

Fixed costs added to variable costs give the ______ cost for the period, whether that is a month or a year. Dividing total costs by the number of units sold gives the total cost per ______. Variable cost per unit is total variable costs divided by units sold, and fixed cost per unit uses total fixed costs in the same way. Multiplying a monthly cost by twelve changes it into an ______ cost, which covers the whole year.