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Yes, part-time help is generally considered a variable cost. This is because the expenses associated with part-time employees can fluctuate based on the hours worked or the number of employees hired, directly impacting overall labor costs. Unlike fixed costs, which remain constant regardless of production levels, variable costs change in relation to business activity.
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What is cost behavior?
Cost behaviour is the relationship between an activity and its cost. There are several different types of cost behaviours as I will demonstrate:Variable Cost:Costs that changes in total according to the activity level but have a fixed per unit cost. An example of this is raw material: if you are a shoe producing company, for each shoe produced, you will need one lace, so the cost of the last is variable depending on the amount of shoes product. The cost of the lace itself is fixed, but the total cost of production is variable.Fixed Cost: Costs that remains unchanged, regardless of the level of activity. An example of this is depreciation on buildings: regardless of how much production happening within the business, the amount of depreciation does not change. The per-unit depreciation cost decline with each additional unit produced, but the total cost of depreciation does not change.Step variable cost:Costs that are generally variable, but are fixed for a small range - items that are incrementally purchased and consumed. An example of this is a part time worker in a restaurant, when activity exceeds a certain range, another waitress needs to be scheduled, but a marginal increase in customers does not require another waitress. That is, an additional waitress can service another range of customers before another waitress needs to be scheduled.Step fixed cost:Costs that are fixed over a wide range but changes after a certain range. An example of this is the cost of indirect labour: a full time manager can oversee the factory for a certain range of activity before s/he can no longer handle it and thus a new full time manager or assistant manager needs to be hired to help. These managers are paid a salary thus the amount they are paid are fixed in that sense.Mixed cost: Some costs exhibit characteristics of both fixed and variable. An example of this is your phone bill. Each month you pay a fixed amount, but when you make a long distance phone call for example (assuming that it is not included in your monthly service), you will pay a charge per minute which is a variable cost.
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
Is depreciation on vehicle fixed cost or variable cost?
Depreciation on a vehicle is generally considered a fixed cost. This is because it does not fluctuate with the level of production or sales; instead, it remains relatively constant over time, reflecting the vehicle's loss of value. Regardless of how much the vehicle is used, the depreciation expense will still be incurred.
Are variable expenses for the same amount each time?
yes it is because of the instent cash flow of the variable flow of expenses.
How do you overcome limitations of cvp analysis?
To overcome the limitations of Cost-Volume-Profit (CVP) analysis, it's important to recognize its assumptions, such as constant selling prices and variable costs. Incorporating scenarios and sensitivity analyses can help account for changes in market conditions and variable costs. Additionally, using more complex models that include factors like economies of scale and changes in fixed expenses can provide a more comprehensive view. Regularly revisiting and updating the analysis with real-time data ensures that it remains relevant and accurate.
Is variable cost a relevant cost?
No. If a variable cost does not differ between alternatives than it is irrelevant.
Is it true the variable cost varies with time?
yes ofcourse
Are direct costs variable costs?
If direct labor don't change with number of units product then it is fixed cost but if it changes with the change in production units then it Is variable cost.
What is the independente variable?
Independent variable(manipulated variable) is a variable that is changed delibertly by the experimentor. *most of the time the first part of a projects question is the independent variable.
Is mortgage payment a variable cost?
Mortgage payment can either be fixed or variable cost. A fixed cost means the interest rate charged on the loan will remain the same for the loan's entire term. A variable cost means the interest rate changes or decreases as time pass.
Examples of variable costs?
Variable costs are corporate expenses that vary in direct proportion to the quantity of output. Unlike fixed costs, which remain constant regardless of output, variable costs are a direct function of production volume, rising whenever production expands and falling whenever it contracts. Examples of common variable costs include raw materials, packaging, and labor directly involved in a company's manufacturing process.The formula for calculating total variable cost is:Total Variable Cost = Total Quantity of Output * Variable Cost Per Unit of OutputThe term variable cost is not to be confused with variable costing, which is an http://www.investinganswers.com/term/accounting-835method related to reporting variable costs.some examples would be cost of goods sold, sales commissions, shipping charges, delivery charges, costs of direct materials or supplies, wages of part-time or temporary employees, and sales or production bonuses
Is variable cost part of opportunity cost?
According to Wikipedia and definition with which I agree: Variable costs are expenses that change in proportion to the activity of a business.Variable cost is the sum of marginal costs over all units produced. Opportunity cost on the other hand is not included in the financials in any way shape or form. In manufacturing, electricity can be fixed but a portion can be variable depending on machinery and extended hours. The opportunity cost can be the cost of your time to perform certain duties versus and the benefit from the duty you cannot perform due to the one you chose to perform.
Is months of the year a categorical variable?
It depends on how the variable is used. At its simplest, it would be a nominal or categorical value but, if used as part of a time series, it would be an ordinal variable.
What was the Cost of gallon gas in June 2006?
The cost of a gallon of gas at any time is more a variable of geographic location than anything else.
Is opportunity cost define as the real cost or the variable cost?
The opportunity cost is defined as alternative cost - costs measured in output of products and services forgone.It can't be defined as variable cost. In the simple formula p = 2q + 100, we can say that 2 is the variable cost. In other words: it's not fixed like the 100.Opportunity costs are not restricted to financial or monetary costs though. The real costs of output forgone (e.g. when choosing between a number of products like shotguns and bananas), lost time / pleasure, or any other benefit that provides benefit should also be considered opportunity costs. Therefore real costs are part of opportunity costs.
Why is variable cost?
Variable cost is an expense that changes over time in contrast to fixed cost. A company which expands in a given time will see that they have to allocate budget for hiring new employees to better accommodate their clients. However, if the company experiences some difficulties in the future, they will sure downsize their workforce which leads to decrease in budget for human resource.
What the investigator varies in the experiment such as time?
A parameter in an experiment that can change is known as a variable.
