| Fixed costs are expenses that remain entirely or primarily constant; for example, manufacturing, selling, and administrative costs that tend to remain fairly constant regardless of sales or production.
Variable costs are expenses that change in proportion to the activity of a business.
For example, a manufacturing firm pays for raw materials. When activity is decreased, less raw material is used, and so the spending for raw materials falls. When activity is increased, more raw material is used and spending therefore rises. Note that the changes in expenses happen with little or no need for managerial intervention. So raw materials costs are variable costs.
Mixed costs consist of a fixed component and a variable component. The annual expense of operating an automobile is a mixed cost. Some of the expenses are fixed, because they do not change in total as the number of annual miles change. Think insurance, parking fees, and some depreciation. Other expenses are variable, because they will increase for the year when the miles driven increase (and will decrease when the miles driven decrease). Think gas, oil, tires, and some depreciation.
Hope this helps. | 
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