Question

A budget is a list of estimated expenses and income which is recorded to determine whether a profit, loss or break-even will be made at the conference. Differentiate between fixed costs and variable costs that will be incurred as a result of hosting the conference. Support your answer by providing examples relevant to the case study.

Answer 1

Fixed costs are expenses that do not change regardless of the number of attendees at the conference. Examples of fixed costs in this case study could include venue rental fees, equipment rental fees, and speaker fees. These costs remain the same regardless of the number of attendees.

Variable costs, on the other hand, are expenses that vary based on the number of attendees or the level of activity at the conference. Examples of variable costs in this case study could include catering costs, printing costs for materials, and transportation costs for speakers. These costs can fluctuate depending on the number of attendees or the specific requirements of the conference.