Give example of Fixed Cost and variable Cost in banking industry or financial services.
Fixed costs are rent, salaries, licenses, etc. If the expense is not driven by production and you would pay a certain amount no matter what your revenue is, that's a fixed cost.
Variable is just the opposite. Commissions, sale of business, investment expense. These are all driven by revenue and if that increases, the expense will increase relatively.
Break even would be subtracting fixed expenses from your contribution margin (revenue minus variable expenses). The result will be your total cost and if you set your price to that, you will break even. |
