how do fixed costs differ from variable costs 
unlike fixed costs variable costs are directly related to the cost of production of goods or services variable costs are commonly designated as the cost of goods sold cogs whereas fixed costs are not usually but can be included in cogs fluctuations in sales and production levels can affect variable costs if factors such as sales commissions are included in per unit production costs meanwhile fixed costs must still be paid even if production slows significantly the bottom linea fixed cost is one type of business expense the other type is a variable cost fixed costs are expenses that do not change as production levels change rent is one example of a fixed cost unlike fixed costs variable costs e g shipping change based on a company s production levels 