EI for leaders

' Definitions :
Opportunity cost :
Sunk cost : has already been lost an cannot be changed. focus on what happened , we cannot make a good decision. Make the mistake of taking the sunk cost to make a decision. Transfering a mistake on a new decision. Should forget about the sunk cost and find a solution to focus on a main objective like succeeding an exam. We shold not keep building on the mistake
Incremental or differencial cost:
When we make on a decision we need focus on what will be different from the first to the second state

Exercise p.56 2.9
Purchase a building is a long term investment so It is not a cost
Rent the purchase building
Opportunity cost

Direct material cost by unit(:variable cost change by unit)
Variable cost
Direct material salary supervisor
Manufacturing overhead : supervise prooduction
Fixed cost
Direct labor cost per unit
Variable cost

Rent space
Fixed cost
Period cost
Rent equipment
Fixed cost
Manufacturing overhead
Depreciate the building
Fixed cost
Moh: SUNK OPPORTUNITY:
Advertising
Fixed cost period Cost of shipping
Variable cost
Sellting cost
Electrical cost
Variable cost
MOH
Liquidate some temporaly investment

Opportunity cost

Cost of sale/ cost of goods sold: the cost of having the product ready for sale (manufacturing cost)
Selling cost: are the cost incurred by those selling the product/ part of the current transaction/ or prepare for the coming transaction in the futur

Price taker: act on our margin
When I go to a tailor: I buy time(labor, expertise ,experience) and materials

Raw material
Work days
Rent cost/ depreciation cost
Transportation in
Oursourcing cost
Utility cost
Design cost
Advertisng cost
Margin
20%
Final price
Dress 1 3000
200dh/ day
2000
400
100
500
30
1000
100
1426
Before margin: 7130
After margine8556
Dress 2
200
200/ day
400
400
100
0
30
0
-
228
Before margin:1140
After margin:1368

Can trace easily and control