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That is an expense that is not changed by the amount of production. For instance, your rent will be the same whether you produce a million widgets or only 1000.
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Can fixed cost become variable cost?
Yes. Say that you own an IT company which repairs and services computers for other companies. If you changed some of your technicians' annual salaries to per-hour-of-service pay, you would change this employment expense from fixed to variable.
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 capital a fixed cost?
capital is a fixed cost
Select a cost in your industry that is a fixed cost and why is it considered to be a fixed cost?
rental
When is fixed cost relevant in decision making?
When there will be change in fixed cost of business then at that time fixed cost will be relevant cost For Example if acquiring new machinery will reduce the amount of fixed expense in that case fixed cost is also relevant.
How do you calculate variable unit costs and total annual costs?
Annual units sold, 1000. Raw materials annual cost 650. Building rent annual cost 9000. If sales volume increased to 6000 units and 8000 units, what is the total annual cost and unit cost for fixed varible? ---------------------------- Cost per unit of raw material=650/1000= 0.65 Fixed cost(Rent)=9000 Fixed cost per unit= 9000/1000= 9.00 If the sales volume increases to 6000 units, then total cost= 12900 and cost per unit = 2.150 Variable cost+ fixed cost= (0.65*6000) + 9000= 12900 / 6000 = 2.15 If the sales volume increases to 8000 units, then total cost= 14200 and cost per unit = 1.775 (0.65*8000) + 9000= 14200 / 8000 = 1.775
Is Factory insurance fixed cost?
Factory insurance is considered a fixed cost within a monthly or annual budget. When putting together a budget that goes longer than one year factory insurance would not be considered a fixed cost.
Explain discretionary fixed costs and committed fixed cost?
Discretionery Fixed Cost: It is cost which arise from annual decisions of management to spend in specific fixed costareas, such as marketing and research.Commited Fixed Cost:These types of costs relate to a company's investment in assets such as facilities and equipment. Once such costs have been incurred, the company is required to make future payments
Can an annual revenue of 2 301 288.50 cover fixed cost if fixed cost represents 50 percent and variable cost represents 50 and rent represents 30 percent of fixed costs?
that'll depend on how much is your total cost. A good decision making tool that can help you here would be break even analysis. Formula = Fixed cost / Contribution per unit.
A company has two option. buy or make. if buy then 10 variable cost and 600 fixed cost. if make 8 variable cost and 50000 fixed cost. annual requirement 20000. Find Breakevenpoint in excel chart?
Breakeven point cannot be find out until sales revenue or selling price is not provided only the fixed and variable cost is not enough.
How much does an annuity cost?
There are different types of annuities. Variable annuities cost much more and I wouldn't recommend one. Now with Fixed Indexed Annuities you can have the potential of the upside of the market without any of the loss. Fixed and Fixed Indexed annuities typically do not cost a cent unless you have added a (rider) to the product that has a small annual cost.
If annual units sold of 6000 raw materials has total annual cost of 3900 and building rent has total annual cost of 9000 what is the unit cost of variable costs?
Building rent of 9000 is assumed to be fixed cost as no matter any work done or not this rent is required to be paid.So raw material cost is total variable cost which is = 3900total units produced = 6000variable cost per unit = 3900 / 6000variable cost per unit = 0.65
Can fixed cost become variable cost?
Yes. Say that you own an IT company which repairs and services computers for other companies. If you changed some of your technicians' annual salaries to per-hour-of-service pay, you would change this employment expense from fixed to variable.
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 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
Select a cost in your industry that is a fixed cost and why is it considered to be a fixed cost?
rental
