Response
The three companies that I choose to discuss include Boeing, General Motors, and Dell. Boeing designs, manufactures, and sells airplanes, rotorcraft, rockets, and satellites worldwide. General Motors designs, manufactures, markets, and distributes vehicles and vehicle parts. Finally, Dell manufactures, sells, repairs and supports computers and computer parts worldwide. These three companies are the prime examples of giant multinational manufacturers headquartered in the U.S. Unit costs include all fixed costs, variable costs, and overhead costs involved in production (Walther & Skousen, 2009). For these manufacturers, I speculate that the unit costs of production could be calculated by dividing the total manufacturing costs by the …show more content…
For Boeing, General Motors, and Dell, the fixed costs would probably include the rent or mortgage payments these companies pay for their factories and office buildings, the property taxes and utilities expenses, insurance premiums and the depreciation taken on the factory and office buildings and production equipment, salaries paid to non-hourly employees including factory floor supervisors and corporate executives. For example, if Boeing rents a building for its factory for $25,000 per month, it will have to pay $25,000 for every month even if no airplane or airplane part is produced during the month.
Next, variable cost is a cost that changes, in total dollar amount, with the change in the level of activity (Horngren et al., 2012). For Boeing, General Motors, and Dell, the variable costs would probably include direct labor, direct materials such as component parts, and certain variable overhead costs such as production equipment supplies, replacement machine parts, factory manager production bonuses. For example, if the metal parts needed to make a car cost $7500 and General Motors produce 2,000 cars in a month, the monthly cost associated with the metal components is
The three companies that I choose to discuss include Boeing, General Motors, and Dell. Boeing designs, manufactures, and sells airplanes, rotorcraft, rockets, and satellites worldwide. General Motors designs, manufactures, markets, and distributes vehicles and vehicle parts. Finally, Dell manufactures, sells, repairs and supports computers and computer parts worldwide. These three companies are the prime examples of giant multinational manufacturers headquartered in the U.S. Unit costs include all fixed costs, variable costs, and overhead costs involved in production (Walther & Skousen, 2009). For these manufacturers, I speculate that the unit costs of production could be calculated by dividing the total manufacturing costs by the …show more content…
For Boeing, General Motors, and Dell, the fixed costs would probably include the rent or mortgage payments these companies pay for their factories and office buildings, the property taxes and utilities expenses, insurance premiums and the depreciation taken on the factory and office buildings and production equipment, salaries paid to non-hourly employees including factory floor supervisors and corporate executives. For example, if Boeing rents a building for its factory for $25,000 per month, it will have to pay $25,000 for every month even if no airplane or airplane part is produced during the month.
Next, variable cost is a cost that changes, in total dollar amount, with the change in the level of activity (Horngren et al., 2012). For Boeing, General Motors, and Dell, the variable costs would probably include direct labor, direct materials such as component parts, and certain variable overhead costs such as production equipment supplies, replacement machine parts, factory manager production bonuses. For example, if the metal parts needed to make a car cost $7500 and General Motors produce 2,000 cars in a month, the monthly cost associated with the metal components is