If it varies with the level of production then it is variable cost otherwise it is fixed cost.
Yes, promotion expense is typically considered a variable cost because it can fluctuate based on sales levels and marketing strategies. Companies often adjust their promotional spending in response to sales performance, new product launches, or seasonal demands. As a result, higher sales may lead to increased promotional expenses, while lower sales could reduce these costs.
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
Sales aren't any sort of cost. They are the opposite of costs.
The sales price includes variable cost, the cost of the unit and the markup. Sales price is the rate customers pay for the item.
Breakeven point = Fixed Cost / Contribution margin Contribution margin = (Sales - Variable cost) / Sales
can be fixed or variable
If Variable cost and sales ratio is provided then by using mathematical equation approach mixing figures can be found by using provided figures. Sales = Variable cost + Sales percentage of (Variable cost)
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
sales-variable cost= contribution
Sales aren't any sort of cost. They are the opposite of costs.
The sales price includes variable cost, the cost of the unit and the markup. Sales price is the rate customers pay for the item.
You cannot. Sales and variable costs must be functions of the units (quantities) sold and produced.
The Profit Volume (PV) Ratio is the ratio of Contribution over Sales. It measures the Profitability of the firm and is one of the important ratios for computing profitabilty. The Contribution is the extra amount of sales over variable cost. Contribution is also Fixed cost plus profit. Profit = Sales - Variable Cost - Fixed Cost. Thus Contribution is: Profit + Fixed Cost = Sales - Variable Cost. Therefore PV Ratio = (Contribution/Sales)X100. (This as a percentage of sales)
Breakeven point = Fixed Cost / Contribution margin Contribution margin = (Sales - Variable cost) / Sales
The Profit Volume (PV) Ratio is the ratio of Contribution over Sales. It measures the Profitability of the firm and is one of the important ratios for computing profitabilty. The Contribution is the extra amount of sales over variable cost. Contribution is also Fixed cost plus profit. Profit = Sales - Variable Cost - Fixed Cost. Thus Contribution is: Profit + Fixed Cost = Sales - Variable Cost. Therefore PV Ratio = (Contribution/Sales)X100. (This as a percentage of sales)
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
Formula for breakeven point = Fixed Cost / Contribution margin Contribution margin = Total Sales - variable cost SO using above mentioned formula break even sales can be found.