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Convert fixed costs to variable costs

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One member of your team emailed you and stated that she believes Claire's Antiques should work to convert the fixed costs to variable costs. She wants to know if this is a good idea. Why or why not? If not, then when would it be a good idea? Reply to your friend with the answers to her questions. In your reply, identify the types of costs Claire's Antiques would probably incur that are fixed.

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One member of your team emailed you and stated that she believes Claire's Antiques should work to convert the fixed costs to variable costs. She wants to know if this is a good idea. Why or why not? If not, then when would it be a good idea? Reply to your friend with the answers to her questions. In your reply, identify the types of costs Claire's Antiques would probably incur that are fixed.

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Variable costs are costs which changes directly in proportion to the level of sales in dollars or units sold. For example direct material, direct labor, sales commission, bonus etc.
Fixed costs are those costs which remain the same irrespective of the production or sales level.

Thus Claire's can have fixed expenses such as interest, rent, insurance, ...

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