Fixed cost

emphasis on controlling fixed cost in their organizations because fixed costs can decrease per unit if the number of units increase, up to an extent (Edmonds, Tsay, & Olds, 2011). Fixed costs are the costs that remain unchanged regardless of an increase or decrease in the number of units sold (Edmonds, Tsay, & Olds, 2011). Therefore, if the number of units sold increases, the total fixed costs is distributed throughout the total number of units sold (Edmonds, Tsay, & Olds, 2011). As a result, the fixed cost per a unit decreases (Edmonds, Tsay, & Olds, 2011). If the number of units sold decreases, the total fixed costs is distributed to a few units only (Edmonds, Tsay, & Olds, 2011). As a result, fixed cost per a unit would increase (Edmonds, Tsay, & Olds,…

Rent is a fixed, committed cost because it does not change due to differences in activity levels. In other words, rent is always a cost that will be due regardless of business activity level. It is generally considered a committed cost because once you sign the lease you are committed to paying rent for the life of the lease (Walther, 2012). Property taxes on land and building are fixed committed cost due to the fact that it does not change as per stipulated tax period. This tax does not affect…

The numbers of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below: week meals served 1 2 3 4 5 6 7 1,500 1,600 1,800 1,450 1,200 1,650 1,900 cafeteria costs (RM) 4,800 5,080 5,280 4,900 4,000 5,100 5,400 Assume that the relevant range includes all of the activity levels mentioned in this problem. Required: A. Use the high low method to establish the fixed and variable component of…

What is the difference between a fixed and a variable cost? Variable costs can change their original price for a product. Fixed costs are constantly the same, no matter how much output a company produces. A variable cost is a company 's cost that is associated with the amount of goods or services it produces. A company 's variable cost increases and decreases with the production volume. 7. Why would you research the cost of a product before you purchase it? I am defiantly the kind of person to…

Part A: Basic Economic Ideas # 1. Monopolistic Competition • Monopolistic competition is # 2: Fixed Cost • Fixed Costs are the constant costs that do not change with the quantity of output. For example, the fixed costs of a firm will be the equipment purchased for making products. • The picture represents the theory of Fixed Cost. The shopping cart in Costco is a fixed cost of the company. Once the company purchases the shopping carts, no matter how many products…

Officer. I also had another option and that was learning automotive. In high school I took all the agricultural classes and noticed a new class they were planning. The class was a small engines class. I signed up for that class to learn about engines and I loved it. When the teacher told us we were going to have a test on taking apart the engine and putting it back together. I decided that automotive fit me better because of how I grew up learning from my uncle. I also encountered a problem…

started this program they made a standard for all their facilities to follow by the end of 2013 only five years since it started they had a zero landfill policy. Somethings that might be used by their recycling is cafeteria waste is used for landscaping after being composted another one is repairing pallets or if they could not be fixed shred them for animal bedding and they started making landscaping stone out of countertops this is just a few examples of how the standard has helped the…

With this in mind, Sheryl explained that Cost-Volume-Profit (CVP) analysis would be useful to Thomas after he gathered some basic information about costs, revenues, and units of service. She explained that CVP is a fundamental management accounting tool that is useful for planning, control, and decision making. It explores important relationships between costs, volume or activity levels, and…

south has fruits, and the center region has meats. Living in the Midwest, the most common food facilities produce, meats, soy and pizza toppings, the best examples are Tyson and Hormel Foods. That is what my business does we manufacture the best kind of food; brownies. Brownies sell all over the country in grocery stores and markets as a quick dessert for those who do not excel at baking, or for those who do not have the time to make them. Food businesses are high profit because no matter…

Variable costs will vary in direct proportion to changes in the level of an activity (1. Walther & Skousen, Managerial and Cost Accounting, 2009, 37). In other words this cost can’t be the same in all periods of time. It can be for example electricity bill for company’s office or fuel for the truck in the warehouse. Fixed costs are opposite for variable costs. Fixed cost don’t change with the level of an activity. Even if the output or input of a unit changes, it will still remain in the same…