Fixed costs are costs that will be the same for the next year. In my Construction Business fixed costs are office rent, office utilities, advertising costs, etc. In a year, these costs can be known ahead of time and won't need to change even if my company does more work.
Variable costs are costs that can rise or fall depending on how much work I contract. Say I sign up 20 jobs this year, I will have to hire more employees, buy them trucks, rent them cell phones, and those costs will correspond to the amount of work going on, therefore variable.
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