total fixed costs are costs that do not change in relationship to how many products are made or sold. among the expenses that make up fixed costs are the amount paid to own or rent a factory or warehousr and the amount paid for business insurance. variable costs change according to the level of production. included are the expenses for the materials used in making products and the direct costs of labor used in making those goods. for example: imagine that you are an exporter selling a sweater for U.S $20 and have a fixed cost of U.S $200,000 (for mortgage interest, real estate taxes, equipments, and so on). your variable cost (e.g labor and material) per sweater is U.S $10. the break-even point would be 20,000 sweater. in other words, you wouldn't make any money selling sweater unless you sold more than 20,000 of them: