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What are examples of organizations with high fixed costs and low variable costs?
Arilines, utility Companies
What does waive all costs mean?
To "waive all costs" means to forgo or relinquish any fees, charges, or expenses that would typically be associated with a service or transaction. This means that the party waiving the costs will not require payment from the other party, effectively making the service or transaction free of charge. It's often used in legal agreements or promotional offers to encourage participation or acceptance.
Why do companies allocate cost?
Companies allocate costs so that all elements that are part of that cost share the incurred costs. It is like spreading the costs amongst those that use it. Companies allocate costs merely to assign responsibility of those costs to either several departments within that company or to just one department. For example, think of a multi-divisional business that has to provide a security service to protect its building, all divisions in that business will share the costs of the security service.
What costs are there for a small business to accept credit cards?
The costs involved in small businesses accepting credit cards are quite high. Small businesses are charged a fee per credit card transaction. This fee will vary from country to country. It is common among most - if not all - major credit cards, that the transaction fee increases when a "premium" credit card is used. These "premium" cards allow the cardholder to reap rewards, while the business owner suffers. In Canada, for example, the transaction fee ranges from approximately 2% to 3% per transaction (for Visa and MasterCard).
In order to reduce labor costs what might a company do?
some companies have outsourced jobs to Another Country as they can reduce labor costs that way.
What does the phrase internalizing an external cost mean?
Internalizing an external cost means incorporating the cost of negative externalities, such as environmental damage or health impacts, into the pricing of a product or service. This helps reflect the true cost of production and consumption by accounting for effects beyond the immediate transaction.
What banks have the lowest transaction costs?
The banks that have the lowest transaction costs would be Credit Unions which typically do not charge transaction fees. Other banks such as HSBC have transaction fees that amount to $2.50 per transaction.
What are the benefits to financial advisory services of adopting information system networks?
This was allowing companies to reduce transaction costs, make better investment decisions, and deliver new products more quickly, thereby increasing customer service and lowering overhead costs
Does bartering have lower transaction costs?
No the transaction cost of bartering is higher because in this various types of cost ared included.
How do markets reduce transaction costs?
Transaction costs can be reduced in a number of ways by offsetting the cost to other parts of the business. Reductions like cheaper product sourcing and staff cuts are necessary.
What are the main OMM costs for companies?
What is OMM costs?\
Why is transaction cost important?
Transaction costs are important because they influence the efficiency of economic exchanges and the overall functioning of markets. High transaction costs can deter participation in trades, leading to reduced market liquidity and inefficiencies. They also play a crucial role in determining the structure of firms and industries, as businesses seek to minimize these costs through vertical integration or other strategies. Understanding transaction costs helps in designing better policies and contracts to facilitate smoother economic interactions.
Why are transaction cost important?
Transaction costs are important to investors because they are one of the key determinants of net returns. ... Different asset classes have different ranges of standard transaction costs and fees. All else being equal, investors should select assets whose costs are at the low end of the range for their types.
What does the transaction cost approach implies that an organization should?
select a mechanistic structure to reduce costs
What costs are the responsibility of the seller in a real estate transaction?
A real estate transaction is negotiated, which means the costs can be split up any way that the parties agree. Typically in the US the negotiation starts with the seller offering to pay commissions for both agents involved in the transaction, but there is nothing that requires this to be the case and the parties can agree to something different if they choose.
Why are spillover costs called negative externalities?
Spillover costs are called negative externalities because they are external to the participants in the transaction and reduce the utility of affected third parties (thus "negative").
Why do companies outsource reengineering?
Key reasons companies outsource BPR are: they are able to negotiate and control costs; it frees up in-house resources for other purposes; they can secure resources not available internally; efforts may be accelerated through the use of experts.
