Cost Descriptors Memo for MBA 503

In our last Senior Management Team skirmish I was asked to provide a clear definition of divers(a) terms used which were introduced in our budget discussion. The ? exist pattern? terms I forget define atomic transportation system 18 better, unsettled, semi-variable, direct, indirect, sunk, actual cost and opportunity be. Fixed CostsA fixed cost does not pull up stakes. These be ongoing be which stay put relatively constant from calendar month to month. Examples of fixed be are rent, salaries, insurance. For example, our lease cost us $10,500 per month. This cost entrust be fixed for the duration of the lease. variable quantity CostsVariable be are be that are directly relate to changes in performance and are defined as the costs of goods sold, variable costs include raw materials, labor, and sales commissions. As ledger of output increases so does the amount of materials needed as surface as the costs of shipping and the additional cost of payroll departme nt for hourly staff. For example, when the add of students increases from 6,000 a year to 7,000 a year, the costs of the production and shipment 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 mixed costs, are costs that are partially fixed and partially variable.

For example, service weapons platform bills, copier lease and telephone bills, these can start of fictive with a flat fee and incur a per-minute or another variable charge (going ove r the maximum number of copies for the copie! r) once a certain level is reached. The table to a lower place helps illustrate the differences in fixed, variable and semi-variable costs. OPERATIONAL COSTSFIXEDVARIABLESEMI-VARIABLELeaseTextbook production costsUtilitiesInsurance (building)Shipping chargesPhoneNon conciliate SalariesHourly employee?s payrollCopier leaseSupplies (paper)Direct CostsDirect costs are those that are directly attributable to the manufacturing of a product. For... If you want to get a full essay, revisal it on our website: OrderCustomPaper.com

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