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Salary is typically considered a fixed cost because it remains constant regardless of the level of production or sales within a certain range. For example, employees on a salary receive the same amount each pay period, irrespective of how much work is generated. However, in some cases, salaries can have variable components, such as bonuses or commissions, which can fluctuate based on performance or company profits.
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Example of fixed costs in a pizza business?
I would suggest that a possible fixed cost would be the salary of the owner.
Is salary and commission a mixed cost?
Yes, salary and commission can be considered a mixed cost. Salary represents a fixed cost since it is usually a consistent, predetermined amount paid to employees, regardless of performance. In contrast, commission is a variable cost that fluctuates based on sales performance or productivity. Together, they create a mixed cost structure that combines both fixed and variable components.
Is salesperson salary a period cost?
Yes a salesperson salary would be classified as a period cost.
What happens when 'fixed cost' decreases?
Cost can be either fixed cost or variable cost. Fixed costs are the costs that are fixed in nature and do not vary with the change in scale of production. Example of fixed costs are: factory rent. Variable costs vary with the change in scale of production. Example: Raw material cost Net Margin= Sales- Fixed cost- Variable cost Decrease in fixed costs lead to increase in margin of an organization; keeping all other things constant. Sometimes, benefit of decrease in fixed cost may be transferred to the consumer in the form of lower price. Lower price results in higher sales volume with lower sales margin per unit.
What is the Definition of semi-fixed costs?
A semi-fixed cost is fixed over a given, small range of activity, and above that level of activity, the cost suddenly jumps. It stays fixed again for a while at the higher range of activity, and when the activity moves out of that range, it jumps again. A semi-fixed cost moves upward in a step fashion, staying at a certain level over a small range and then moving to the next level quickly. All fixed costs behave this way, and a wholly fixed cost is also fixed only as long as activity remains within the relevant range. However, a semi-fixed cost is fixed over a smaller range than the relevant range of a wholly fixed cost. An example of a semi-fixed cost is the nursing staff in a hospital. If the hospital needs one nurse for every 25 patients, then each time the patient load increases by 25 patients, one additional nurse will be hired and total nursing salaries will jump by the additional nurse's salary. That is in contrast to administrative staff salaries at the same hospital, which might remain fixed until the patient load increases by 250 patients, at which point an additional admitting clerk would be needed. The administrative staff salaries are wholly fixed costs (over the relevant range), whereas the nursing staff salaries are semi-fixed costs.
Is the salary of a lecturer a fixed or variable cost?
If salary is on per lecture basis then it is variable cost otherwise it is fixed cost.
Is executive salary a fixed or variable cost?
Fixed
What type of cost is salary expense?
fixed cost
Is a supervisor's salary a fixed or variable cost?
A supervisor's salary typically is considered a fixed cost. The salary of a supervisor typically would not be variable, unless there were other things involved, such as bonus pay.
Is the salary of a psychiatrist a fixed or variable cost?
Variable if the psychiatrist is paid at a certain rate hourly or daily; fixed if the salary is fixed for a given period (i.e.) annually).
Is the production manager's salary is an example of variable cost?
Because the production manager's salary remains the same, regardless of the production level, this salary is a fixed cost, not a variable cost.
Is a salesman's salary considered a fixed or variable cost?
variable
Is direct labor a fixed cost?
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
Is direct labor fixed Cost?
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
What are examples of fixed and variable cost factory?
examples of fixed cost factory are salary, rent, electricity bills while variable cost are purchase of raw materials,
Example of fixed costs in a pizza business?
I would suggest that a possible fixed cost would be the salary of the owner.
Is salary and commission a mixed cost?
Yes, salary and commission can be considered a mixed cost. Salary represents a fixed cost since it is usually a consistent, predetermined amount paid to employees, regardless of performance. In contrast, commission is a variable cost that fluctuates based on sales performance or productivity. Together, they create a mixed cost structure that combines both fixed and variable components.
