Martin Green owns a hairdressing shop. He employs 5 hairdressers. The list below shows some of the costs that he incurs:
(i) Salaries of hairdressers
(ii) Depreciation of chairs and equipment
(iii) Lease on shop
(iv) Rates
Which of the costs can be regarded as variable in nature?

Question

Martin Green owns a hairdressing shop. He employs 5 hairdressers. The list below shows some of the costs that he incurs: 
(i) Salaries of hairdressers 
(ii) Depreciation of chairs and equipment 
(iii) Lease on shop 
(iv) Rates 
Which of the costs can be regarded as variable in nature?

Quizplus · Accepted Answer

Salaries of hairdressers, depreciation of chairs and equipment, lease on shop, and rates are all fixed costs. Variable costs vary with the level of production or services provided, but none of the listed costs directly vary with the number of haircuts or services provided in the shop.

Martin Green Owns a Hairdressing Shop