Hi,

That is a good question. The best way to best classify this is by asking the right question to the interviewer. Some costs can be classified as fixed in some situations and they can classify as variable in others, this all depends on the business model of the company.

In this situation, ask yourself if you can add/remove people easily to the Customer Services team in function of the production/sales? Is the volatility in sales determining the number of people working in the Customer Services department? What if your level of service improves in a particular month (means less complaints), would you be firing people from the Customer Services team the following month?

I think all those questions would help you decide if this is a fixed or variable costs, but from my personal experience & perspective, I believe it would qualify as a fixed costs since you will not be adding/removing people every month based on the sales of the previous month/quarter!

I am happy to discuss this further if needed.

All the best,

Mehdi

Hi,

Depends on the business. E.g. in retail returns are considered as customer care and they are variable. In software B2B services I would assume its fixed

Best

Hi,

This is a fair question. You always need to confirm that with your client/interviewer to align your understanding. Customer service is a good example, depending on the flexibility of the client it can be considered as a fixed or a variable cost.

To go to the extreme if you don't sell anything, you will not have any fixed cost :).

Bertrand

Hello!

It´s a good question, but totally depends on each business model.

As a rule of thumb ask yourself: are this customre services people going to be here at the end of the month if we have a decline of 50% of the sales?

Cheers,

Clara