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Yes. Variable cost varies with the activity of the business. Unless the wage given is in accordance with the activity level for e.g. piece rate, then it should be fixed cost.
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Is wages of workers a fixed cost?
No
Which is an example of a monthly fixed cost for s sandwich shop?
An example of a monthly fixed cost for a sandwich soap is the monthly rent or the wages that they pay monthly.
Why direct production labor cost might be regarded as a fixed cost rather than as variable cost?
Direct labor wages are normally Variable costs, charged directly to the Production Cost Account, what is commonly called WIP. It is commonly held that direct labor wages change proportionally to the changes of the production level. In fact, however, hourly wages are only related to a time unit, not to pieces produced. True direct wages are piece-work wages, but very few industries pay their workers by unit of production. We should have the option to treat a direct labor wage as a fixed cost, just as salary is a fixed cost. Monthly or hourly, these payment are paid by time interval, not by production unit
What are examples of fixed and variable cost in coffee shop business?
Fixed costs i.e. Rents, professional fees like insurances, licences, accountants legal support annual maintanance charges. variables will include the cost of the raw produsts to sell, cleaning materials, wages, utilities
When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
Is wages of workers a fixed cost?
No
Are wages a fixed or variable cost?
wages are variable cost reason being is that wages are being used over and over again and does not remain constant.
Which is an example of a monthly fixed cost for s sandwich shop?
An example of a monthly fixed cost for a sandwich soap is the monthly rent or the wages that they pay monthly.
IS wages a fixed cost?
No, wages are typically considered a variable cost because they fluctuate based on factors such as the number of hours worked and the rate of pay. Fixed costs, on the other hand, do not change with the level of production or sales.
Why direct production labor cost might be regarded as a fixed cost rather than as variable cost?
Direct labor wages are normally Variable costs, charged directly to the Production Cost Account, what is commonly called WIP. It is commonly held that direct labor wages change proportionally to the changes of the production level. In fact, however, hourly wages are only related to a time unit, not to pieces produced. True direct wages are piece-work wages, but very few industries pay their workers by unit of production. We should have the option to treat a direct labor wage as a fixed cost, just as salary is a fixed cost. Monthly or hourly, these payment are paid by time interval, not by production unit
What are examples of fixed and variable cost in coffee shop business?
Fixed costs i.e. Rents, professional fees like insurances, licences, accountants legal support annual maintanance charges. variables will include the cost of the raw produsts to sell, cleaning materials, wages, utilities
When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
Is wages a part of prime cost?
If wages are paid of those workers which directly related with the manufacturing or units then wages are part of prime cost otherwise it is part of conversion cost.
Is capital a fixed cost?
capital is a fixed cost
Fixed cost variable cost equals?
Fixed cost and variable cost is equal to total cost as per following formula: Total Cost = Fixed Cost + Variable Cost
Is payment of wages to employees capital or revenue expenditure?
Payment of wages is classified as a normal running cost of a business, so is stated under revenue expenditure. I got really confused with this one aswell. Anything that is paid regularly and is not a fixed asset or any costs associated with a fixed asset, is capital e.g machinery, improvement, legal fees, delivery. Therefore wages is revenue expenditure, hope this helps.
What is conversion cost in cost sheet?
conversion cost = direct wages + factory overheads (indirect material + indirect wages)
