Depreciation - Research and development - Marketing costs (non- revenue related) - Administration costs 3. Variable Unit Cost: Costs that vary directly with the production of one additional unit. Total Variable Cost The product of expected unit sales and variable unit cost‚ i.e.‚ expected unit sales times the variable unit cost. Variable Costs: Variable costs are those costs which vary directly with the level of output. They represent payment output-related inputs such as
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fixed and variable costs. Fixed costs are those costs which remain constant at all levels of production within a given period of time. In other words‚ a cost that does not change in total but become. Progressively smaller per unit when the volume of production increases is known as fixed cost. it is also called period cost eg. Rent‚ Salary‚ Insurance charges etc. On the other hand variable cost is that cost which varies in accordance with the volume of output. To put it in another way‚ variable costs
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the chi-square distribution because the sum of the squares of independent normal random variables with mean zero and standard deviation one has a chi-square distribution. This section collects some basic properties of chi-square random variables‚ all of which are well known; see Hogg and Tanis [6]. A random variable X has a chi-square distribution with n degrees of freedom if it is a gamma random variable with parameters m = n/2 and = 2‚ i.e X ~ (n/2‚2). Therefore‚ its probability density
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assignment‚ the key elements of the break-even analysis will be discussed. The key elements of break-even analysis are fixed cost‚ variable cost‚ total revenue‚ break-even point and margin of safety. Although break-even analysis is very useful‚ it has disadvantages. Break-even analysis is based on the production cost of the company which includes the fixed cost and variable cost. Then the total cost of the production is compared with the total sales revenue to find out the breakeven point. The break
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$175.00 Audiovisual equipment rental $75.00 4 Presenters @ $500.00 $2‚000 Indirect Cost @25% of $3‚675 $906.00 Profit Margin @5% of $4‚594 $227.00 Total Fixed Cost $3‚383.00 Variable Cost 45 Workbooks @ $15.00 $675.00 45 Lunches @ $12.00 $540.00 45 Coffees @ $3.50 $157.50 Total Variable Cost $1372.50 My Break-Even point and go/no go decision is set at 30 participants. It is set lower so that if we exceed more than thirty participants then the rest would be a profit. Break-Even
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which a firm will face. The objective of Break-Even Analysis is to establish what will happen to the financial results if a specified level of activity or volume fluctuates. This information is vital to management‚ as one of the most important variables influencing total sales revenue‚ total costs and profits is output or volume. Break-Even Analysis is based on the relationship between sales revenue‚ costs and profit in the short run. The short run being a period in which the output of the firm
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relationships among the total volume of some independent variable‚ total costs‚ total revenues‚ and profits during a time period. It is particularly useful in the early stages of planning when it provides a framework for discussing planning issues. Q15-4. In a contribution income statement‚ costs are classified according to behavior as variable or fixed‚ and the contribution margin (the difference between total revenues and total variable costs) that goes toward covering fixed costs and providing
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drives costs at Salem Data Services. Which expenses in Exhibit 2 are variable with respect to revenue hours? Which expenses are fixed with respect to revenue hours? Variable: Wages of hourly personnel‚ Power Fixed: Rent‚ custodial services‚ computer leases‚ maintenance‚ depreciation‚ salaried staff wages‚ administration‚ sales‚ systems development‚ sales promotion‚ corporate services 2.) For each expense that is variable with respect to revenue hours‚ calculate the cost per revenue hour.
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Instrumental variables and panel data methods in economics and finance Christopher F Baum Boston College and DIW Berlin February 2009 Christopher F Baum (Boston College) IVs and Panel Data Feb 2009 1 / 43 Instrumental variables estimators Regression with Instrumental Variables What are instrumental variables (IV) methods? Most widely known as a solution to endogenous regressors: explanatory variables correlated with the regression error term‚ IV methods provide a way to
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Case Study #1. Salem Telephone Company 1. Variable expenses: Power (the more hours sold‚ the more energy consumed) The hourly personnel (operations) works only when the computers are in operation Fixed expenses: The rent has to be paid despite any level of production ($8‚000 monthly) The custodial services depend on Salem Telephone’s estimated space‚ they are independent from the revenue of the Company The computer leases were acquired to run the business (before it was actually started
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