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What is the term for the costs that come from the use of the owner's own resources and therefore are not actually paid out in money?
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Firms with a high degree of operating leverage are?
Have a high amount of fixed costs relative to their variable costs. DOL= CM / Net Income We derive CM by the eqaution of Selling Price - Variable Costs If a firm has high variable costs relative to their selling price then they will have a small CM and therefore their DOL will decrease. Have a high amount of fixed costs relative to their variable costs. DOL= CM / Net Income We derive CM by the eqaution of Selling Price - Variable Costs If a firm has high variable costs relative to their selling price then they will have a small CM and therefore their DOL will decrease.
What is Running cost?
Running costs in are associated with companies and businesses. The running costs are simply the amount of money needed to make the company "run". Running costs include staff payment, electricity costs and resources etc. Running costs are the cost for day-to-day running of the business
What does revenue mean in math?
The revenue is the amount of money a company actually recieves. It is the the number before costs are subtracted.
Advantages of merging two banks?
Advantages of merging two banks include the banks pooling their resources. Another advantage for the banks is decreasing their operating costs.
What is a construction cost plus agreement?
Cost plus agreements have been used in the U.S. construction industry for serveral years. However, they are perhaps the most misunderstood type of agreement used to complete construction projects, especially by non-business savvy attorneys and owners. Under cost plus agreements, owners are responsible for paying for all costs associated with the construction of their project - all costs. A cost plus agreement is not unlike any other agreement between contractors and owners; the owner pays all costs. These costs include both direct and indirect costs associated with the construction of their project. Specifically, these costs include materials, labor, equipment, tools, project overhead, and company overhead. Cost plus agreements get their bad reputations from attorneys who have not even a basic understanding of construction cost accounting and from owners who think they know more about constuction management than their construction professionals because their aunt added a porch to their moblile home last year, and they watched it being constructed. Cost plus agreements provide an effective means of completing construction projects, but all persons associated with the construction project must be construction savvy and have a strong understanding of cost accounting. Anything less will end the contractor in court, simply due to ignorance of the part of owners, attorneys, and judges. Dr. Herbert Barber
A firm's opportunity costs of using resources provided by the firm's owners are called what?
equity financing
What does costs nothing mean?
it is actually saying that courtesy cannot be paid. It can only be made by you. It costs you nothing to be polite -- therefore, why should you be rude?
Why manufacturers locate near resources?
Transportation of resources means costs. So - if resources are near your manufacturing plant - your costs are lower - your incomes are higher.
What does courtesy cost nothing mean?
it is actually saying that courtesy cannot be paid. It can only be made by you. It costs you nothing to be polite -- therefore, why should you be rude?
Why are some budgeted costs based on actual costs from the previous years?
Some budgeted costs are based on actual costs of the previous year, information from supervisors about where resources might be more efficiently used, and subjective judgments about how much should be allowed for resources.
What is the imbalance between unlimited wants and limited resources available to satisfy those wants called?
the problem of scarcity - resources are scarce, wants are unlimited, therefore people are faced with opportunity costs (forgoing wants because they can only achieve some of their wants)
What do you do when marginal costs exceeds marginal revenue?
When MC>MR, then there is an overallocation of resources. This usually happens with a negative externality. The government tries to taxes these businesses so that they will produce less. Therefore, a way to fix overallocation of resources is to tax that company and reduce their output.
Why are Fixed costs also called capacity costs?
Fixed costs are considered capacity costs because if a company expands, fixed costs will change. Additionally, if a company adds more resources, fixed costs will change.
What hidden costs are nor included in GNP?
Hidden costs that are sometimes included in the GNP include costs for depletion of resources, advertising, auto accidents and commuting.
Do costs exist because resources are limited and have alternative uses?
yed
What is the cost of using natural resources?
They May Run Out or Have Higher Costs to Export it.
Cash expenditures a firm makes to pay for resources are called?
Explicit costs
