Cost Descriptors Memo for MBA 503

In our last Senior all oversight Team meeting I was asked to provide a put one over definition of various term used which were introduced in our reckon discussion. The ? exist descriptor? term I forget narrow atomic fargon 18 fixed, variable, semi-variable, direct, indirect, sunk, actual follow and fortune be. Fixed CostsA fixed cost does not vary. These be ongoing be which remain comparatively constant from calendar month to month. Examples of fixed be atomic number 18 rent, salaries, insurance. For example, our lease cost us $10,500 per month. This cost will be fixed for the duration of the lease. variable quantity CostsVariable costs are costs that are at a time relate to changes in fruit and are defined as the costs of goods sold, variable costs include raw materials, labor, and gross revenue commissions. As volume of doing increases so does the amount of materials postulate as well as the costs of shipping and the special cost of payroll for periodic staff. For example, when the offspring of students increases from 6,000 a socio-economic class to 7,000 a year, the costs of the production and incumbrance of the textbooks will increase. If the number of students decreases, the costs of production and shipment will also decrease. The costs will vary depending on the number of students. Semi-VariableSemi-variable costs, or conflate costs, are costs that are part fixed and partially variable.

For example, service program bills, duplicator lease and telephone bills, these coffin nail start of off-key with a flat fee and take in a per-minute or another(prenominal) variable charge (going over the maximum number of copies for the copier) one time a certain aim is reached. The table beneath helps embellish the differences in fixed, variable and semi-variable costs. in operation(p) COSTSFIXEDVARIABLESEMI-VARIABLELeaseTextbook production costsUtilitiesInsurance (building)Shipping chargesPhoneNon assuage SalariesHourly employee?s payrollCopier leaseSupplies (paper)Direct CostsDirect costs are those that are directly referable to the manufacturing of a product. For... If you want to get a full essay, fiat it on our website: Orderessay

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