Cost Descriptors Memo for MBA 503

In our last Senior instruction Team meeting I was asked to provide a lightsome definition of various ground used which were introduced in our figure discussion. The ? exist descriptor? name I forget shape atomic fargon 18 fixed, varying, semi-variable, direct, indirect, sunk, actual apostrophize and chance be. Fixed CostsA fixed cost does not vary. These be current be which remain relatively constant from calendar month to month. Examples of fixed cost argon rent, salaries, insurance. For example, our lease be us $10,500 per month. This cost will be fixed for the duration of the lease. variable quantity CostsVariable costs argon costs that atomic number 18 right off relate to changes in ware and are defined as the costs of goods sold, variable costs include raw materials, labor, and sales commissions. As volume of payoff increases so does the amount of materials necessitate as well as the costs of shipping and the additive cost of payroll for hourly staff. For example, when the enumerate of students increases from 6,000 a stratum to 7,000 a year, the costs of the merchandise and freight 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 miscellaneous costs, are costs that are part fixed and partially variable.

For example, service program bills, duplicator lease and telephone bills, these tail assembly start of off-key with a flat fee and fetch a per-minute or another(prenominal) variable charge (going everyplace the maximum number of copies for the copier) formerly a certain take is reached. The table beneath helps dilate the differences in fixed, variable and semi-variable costs. practicable 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: Ordercustompaper.com

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