Costs

the cost of something includes funds spent carrying out any action. For consumers and producers costs determine how much one is willing to pay or invest in. This could be based on income or current financial status of the consumer or producers. Cost effects the consumer demand and producer sale outcomes. It can also determine the worth of whatever is being sold in comparison to a substitute. The types of costs that affects consumer and producer investments include fixed costs, variable costs,…

Costs of Production Netflix operating income for 2104 was over $5.5M, which was in part due to the increase to the monthly service fee for subscribers and the increase in domestic and international streaming memberships. The company has a plethora of expenses, streaming content rights, licensing, acquisition of streaming content, streaming delivery expenses customer service, payment processing fees, and advertising. Fixed costs are costs that do not change no matter how much product the…

Chapter 5 1. Describe low-cost strategy. How does this relate to differentiation? A. Low cost strategy is a business model where companies do everything in their power to reduce or lower their costs structure to compete in the market to sell their goods at a lower price than its competitors while maintaining the product quality. There are two types of strategies that include in implementation of the low cost strategies, they are: a. Functional strategies & b. Competitive strategies Functional…

certainty the value of one based on the value of another. (Mark, H) For example: The total cost is $10 per unit on average; and if the number of units increases by 1, then the total cost would also increase by $10. Sometimes the result of actual total cost may either increase or decrease, which could be more than $10 or less than $10. In this type of situations, a statistical relation exists between the average total cost and the result. Delphi Method The Delphi method is one of the demand…

for a firm survival in that line of business. This level of profit enables the firm to incur all its running cost of business. However Accountant calculation is rather different because calculation of profit is based on numerical of past monetary costs and revenues and makes no reference to the concept of opportunity cost. Normal profit arise where Average revenue = Average total cost. Normal profit occurs in all types of market in the short run but in it is only in the long under the…

The following essay discuss how cost of producing a product is allocated between direct and indirect cost. One type of direct cost will be identified and examine to how it will reduce cost for WGCN and the consequence of cutting this cost, but maintaining profit and quality. Additionally a flowchart will be use to explain how process work within the laundry department, and later on in the essay Hoskins and Macve (1990) will be summarised and use to explain how it help us “understand modern…

The cost structure of motor carriers is fixed versus variable cost components whereas in the railroad industry, there are three types of cost structure: fixed costs, semivariable costs, and variable costs. The railroad industry has a larger portion of direct and indirect fixed costs than variable cost like the motor carrier industry. This is due to the fact that the railroad industry owns and maintains their own network and terminals and operate their own rolling stock. The railroad industry…

begins.” Transaction costs appear whenever there is “friction” at the point of interface. In other words, Transaction Cost Economics focuses on the organization of transactions that occur whenever a good or service is transferred from a provider to a user across a technologically separable interface. When transactions occur within an organization, the transaction costs can include managing and monitoring personnel and procuring inputs and capital equipment. The transaction costs of buying the…

true profitability of the product or service must be calculated. If the benefits outweigh the cost then the owner must decide how to finance the addition. This paper will evaluate three article relating to obtaining loans in the areas of credit worthiness (Henning, 2016) cost benefit analysis-(Rudegeair, 2016) and industry lending- (Wilson & Durisin, 2016).The three articles reviewed relate to the real cost of business financing and the ability to obtain loans. For small businesses and…

Therefore our Cost of Excess Capacity is 235.600 (19% of Total Quality Control Costs). When we calculate assuming that there are no alternatives uses for the resources tied up in the quality control process, we are essentially stating that since we are not utilising the capacity which we paid a fixed cost for, we are incurring the cost of having it available and not using it. The inability to effectively utilise this excess capacity in another engagement demonstrates the company’s inability to…