Fixed vs variable costs and step costs, with examples

Hanna

Here's a year of our costs, September to August, one row a month. Before anyone says 'break-even', I need every column sorted by how it behaves.

You

Behaves how? They're all just money going out.

Alex Tutor

Put each column next to lessons_delivered. Some rise and fall with it month by month. Some ignore it completely. And one does something odd.

Alex Tutor

Dataset · 12 rows

Klasna's monthly costs, September 2025 – August 2026

One row per month, amounts in UAH. `lesson_sales_uah` is what families paid for the lessons delivered that month.

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Columns
month: Year and month
active_learners: Learners with at least one lesson that month
lessons_delivered: 1:1 lessons that took place
lesson_sales_uah: What families paid for those lessons
tutor_payouts_uah: Paid to tutors for delivered lessons
payment_fees_uah: Payment provider fees, 2.5% of sales
video_ai_uah: Video minutes and AI practice
support_coordinators_uah: Support coordinators, 38,000 each a month
team_salaries_uah: Salaries of the in-house team
office_tools_uah: Office and tools
marketing_uah: Paid social, search and school partnerships

Data

month	active_learners	lessons_delivered	lesson_sales_uah	tutor_payouts_uah	payment_fees_uah	video_ai_uah	support_coordinators_uah	team_salaries_uah	office_tools_uah	marketing_uah
2025-09	820	5002	3056222	1980792	76405.55	155062	114000	540000	84000	190000
2025-10	900	5850	3591900	2322450	89797.5	181350	114000	540000	84000	240000
2025-11	950	6270	3862320	2495460	96558	194370	114000	540000	84000	240000
2025-12	880	5192	3203464	2066416	80086.6	160952	114000	540000	84000	200000
2026-01	930	5952	3678336	2374848	91958.4	184512	114000	540000	84000	240000

Show 7 more rows

2026-02	1010	6767	4188773	2700033	104719.33	209777	114000	540000	84000	260000
2026-03	1120	7840	4868640	3136000	121716	243040	114000	540000	84000	300000
2026-04	1260	9198	5721156	3688398	143028.9	285138	152000	540000	84000	320000
2026-05	1300	9620	6002880	3867240	150072	298220	152000	540000	84000	320000
2026-06	760	4256	2655744	1710912	66393.6	131936	76000	540000	84000	180000
2026-07	520	2600	1627600	1047800	40690	80600	76000	540000	84000	150000
2026-08	580	3016	1888016	1215448	47200.4	93496	76000	540000	84000	210000

Take tutor payouts: 2,066,416 UAH in December with 5,192 lessons, 3,867,240 in May with 9,620. They track lessons. That's a variable cost, and so are payment fees and video + AI.

You

And team salaries are 540,000 every single month, May or July.

Alex Tutor

Those are fixed costs, like office and tools at 84,000. Variable costs compare best per lesson: add up the three variable columns and divide by lessons delivered. Try November.

Alex Tutor

Question 1

Use the monthly costs. What was the variable cost per lesson in November 2025 (tutor payouts + payment fees + video + AI, divided by lessons delivered)?

Your answer

Units: UAH (e.g. 440.25)

You

Support coordinators are the odd one. 114,000 for months, then 152,000 in April and May, then 76,000 all summer.

Hanna

Each coordinator costs 38,000 a month and looks after up to 400 active learners. We add one for every started 400. They're on seasonal contracts, so in summer we can go down.

Alex Tutor

So 114,000 / 38,000 = 3 coordinators, enough for up to 1,200 learners. The cost doesn't move with each learner; it stays flat, then jumps a whole salary. That's a step cost.

Find the month where active learners first went past 1,200. That's where the step happened.

Alex Tutor

Question 2

In which month did Klasna first need four support coordinators?

Choose one answerFebruary 2026March 2026May 2026April 2026

You

Marketing goes up in spring and down in summer, just like lessons. Is it variable?

Alex Tutor

Test it: does one more lesson add marketing spend? No. The budget is set every month. Spring gets more because it's exam season, not because lessons pushed it up.

Leo

True, I signed off 320,000 for April and May myself. In July we cut it to 150,000.

Alex Tutor

So within a month it behaves as fixed: it doesn't change with lessons. But fixed doesn't mean unavoidable. It's a decision you can make differently next month.

Hanna

Salaries too, just more slowly. 'Fixed' says how a cost reacts to volume, not whether we can change it.

Alex Tutor

Question 3

Which statements about Klasna's marketing costs are true?

Choose all that applyOne more lesson delivered doesn't change this month's marketing spendIt's a variable cost, because it rose in spring together with lessonsKlasna can cut it next month simply by deciding toSince it's fixed, Klasna has to pay the same amount every monthFor break-even, it counts as a fixed cost of its month

Leo

So if we double our learners, salaries stay at 540,000?

Alex Tutor

Only within a range. At 2,600 learners you'd need seven coordinators, probably more people in the team, maybe a bigger office. Fixed costs are fixed within a range of volume and a period of time.

Hanna

And over a longer period everything moves: a pay rise next year isn't about volume at all, but the 540,000 won't hold.

Alex Tutor

Coordinators are just the clearest case: flat up to 400 learners, then a jump. Stretch the range far enough and every fixed cost turns into a step.

Alex Tutor

Question 4

True or false: fixed costs can't be cut, which is what makes them fixed.

TrueFalse

You

Adding up the year: variable costs are 31,932,876.28 UAH, everything else 11,668,000.

Alex Tutor

Check what's in the 11,668,000: salaries 6,480,000, office 1,008,000, coordinators 1,330,000 and marketing 2,850,000. For break-even we count all four as fixed costs of their month.

Hanna

So variable costs are almost three quarters of everything we spend. The big number follows lessons; the smaller one has to be covered whatever happens.

Alex Tutor

That split is exactly what break-even needs. Before that, one more check that every column is in the right box.

Alex Tutor

Question 5

Match each cost column with how it behaves.

Pick an answer for each row. Choosing an answer that is already used moves it to this row.

tutor_payouts_uah
Choose an answer
payment_fees_uah
Choose an answer
video_ai_uah
Choose an answer
support_coordinators_uah
Choose an answer
team_salaries_uah
Choose an answer
marketing_uah
Choose an answer

Leo

Something bugs me. In April we had 140 more active learners than in March, yet costs rose by more than their lessons' payouts, fees and video. Where did the rest come from?

You

Part of it has to be the coordinators: 1,260 learners is past 1,200.

Alex Tutor

Go through every column that isn't variable, March against April. Say what changed, by how much, and why.

Alex Tutor

Question 6Short answer · AI-checked task

Leo asks: "In April we had 140 more active learners than in March, and costs rose by more than their lessons' variable costs. Why?" Using the monthly costs, explain it to him in 3–5 sentences.

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Alex Tutor

Next time we put the two together: how many lessons a month cover Klasna's fixed costs.

Alex Tutor

That’s the lesson. You answered every task — nicely done.

Next lesson: Break-even and margin of safety