Sally grew tired of her day job so she decided to open an ice cream shop to fulfill a lifelong goal. She signs a five-year lease for a rental space in a strip mall, purchases two freezers, six tables with chairs, 1000 waffle cones, 2000 medium ice cream cups, 1000 small ice cream cups, 5000 napkins, 5000 spoons, a square branded tablet with monthly subscription, and hires two full-time managers and four part-time employees. Now that you have read about Sally's choice to start an ice cream shop, explain the difference between fixed costs and variable costs associated with running her business beyond those in the aforementioned paragraph and explain why you consider them to be fixed or variable. Note: I am only asking for a minimum of three additional examples. You do not need to necessarily identify three examples for fix costs and three for variable cost.

Q&A Education