This is an introduction to mixed costs. Distinctions between fixed and variable costs are important. As activity increases, total variable costs increase, but fixed costs remain the same. This is accurate within the relevant range. Activity changes outside the relevant range can result in increases in either fixed or variable costs.

After you have read the different sources, describe how the firm where you work, or any business firm, distinguishes between fixed and variable costs. Provide specific examples. In addition, explain whether fixed cost items or variable cost items get any priority in your firm’s internal decisions to distribute available funds. If you are not directly involved in managerial accounting, you may want to discuss these questions with a Chief Financial Officer and share the information with your classmates.
You may not want to address this discussion topic from the perspective of the firm where they work. As such, this can also be discussed from the perspective of how any firm operating in the aviation industry might address the requirements of this discussion topic.