In the context of costs associated with employees, here's how they can be categorized as fixed or variable expenses:
Fixed Expenses:
Example: Salary of a Full-Time Employee
A full-time salaried employee, such as a manager or an administrative staff member, represents a fixed expense. Their salary remains constant regardless of the company's production levels or revenue, leading to predictable costs each month.
Variable Expenses:
Example: Hourly Wages of Part-Time or Seasonal Workers
Part-time staff or seasonal employees who are paid hourly can be considered variable expenses. Their total costs can fluctuate based on the number of hours worked, which varies with the company's workload or production demands, leading to changing expenses based on business activity levels.