Millerstown, on the Nolin River, was the first community to be formally incorporated in 1826; Falls of Rough grew up around the Green Sawmill, which first operated in 1823; and Grayson Springs, a popular summer resort, opened in 1830 and peaked in prosperity about 1900.
Example 1. Assume a business produces clothing. A variable cost of this product would be the direct material, i.e., cloth, and the direct labor. If it takes one laborer 6 yards of cloth and 8 hours to make a shirt, then the cost of labor and cloth increases if two shirts are produced.
Fixed costs are those that do not change as the level of output changes. Variable costs are those costs that change as output changes. Fixed costs can be quite large. In the airline industry, for example, fixed costs range from 40 to 70 percent of total costs.n our widget example, we will assume that the fixed cost for the stapler, pen, and âfactoryâ is $10 and the cost of each worker hired is $5 per worker. Since fixed costs are constant, the firm incurs $10 regardless of the level of output. Labor is the only variable cost computed by $5 times the number of workers.