What example best differentiates fixed and variable costs for a sixth-grade personal finance class?

The choice that best differentiates fixed and variable costs is the one that involves categorizing expenses of a restaurant by customer count. In this context, fixed costs are those that do not change regardless of the level of output or customer volume, such as rent, salaries of permanent staff, and insurance. These costs remain consistent even if the number of customers fluctuates.

On the other hand, variable costs are expenses that vary directly with the level of production or service volume. In a restaurant, this includes costs like food inventory, hourly wages for additional staff, and utilities that might increase due to higher customer counts.

By categorizing expenses based on customer count, students can clearly see how some costs remain fixed (like rent) while others change (like the cost of ingredients) depending on the number of diners. This hands-on approach illustrates the distinction between fixed and variable costs effectively and is relatable for sixth graders as they often understand concepts tied to everyday experiences.