Analysis of Costs Costs affect input choices‚ investment decisions‚ and even the decision of whether to stay in business. A. Economics analysis of costs 1. Total cost: fixed and variable (1) Total cost represents the lowest total dollar expense needed to produce each level of output q. TC rises as q rises. (2) Fixed cost represents the total dollar expense that is paid out even when no output is produced. FC is unaffected by any variation in the quantity of output. (3) Variable cost represents
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Task 1 Task 1 A start-up cost is a cost that you start with for example in the flower shop it would be a deposit on the shop and the first month’s rent. Also the first lot of stock‚ advertisement a sign‚ table‚ counter‚ till and a credit card machine. The operating costs are costs that you carry on paying for throughout the time your business is open‚ for example in the flower shop they would be rent‚ wages‚ heating and lighting‚ insurance‚ loan interest‚ drawing (personal salary) ‚ ribbons
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Millennium plc has been invited to submit a price for an order for 2‚500 units of GX1. The company only makes GX1 to order and currently has no other orders in process. The production requirements for GX1 are as follows: Materials: Three types of material are used in production: Amount Cost Resale Current used per unit price value price to buy Material A 12kg £2.50 £1.00 £2.75 Material B 4kg £7.00 £5.50 £8.50 Material C 6kg - £6.50 - Material A is used
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Cost Benefit Analysis What is cost benefit analysis? Cost benefit analysis (COBA) is a technique for assessing the monetary social costs and benefits of a capital investment project over a given time period. The principles of cost-benefit analysis (CBA) are simple: 1. Appraisal of a project: It is an economic technique for project appraisal‚ widely used in business as well as government spending projects (for example should a business invest in a new information system) 2. Incorporates
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B C D Total Production Volume (units) 10‚000 8‚000 6‚000 4‚000 Selling Price $15.00 $18.00 $20.00 $22.00 Materials/unit $4.00 $5.00 $6.00 $7.00 DLH/unit 0.24 0.18 0.12 0.08 Total DLH 2‚400 1‚440 720 320 4‚880 Plant Overhead $122‚000 DL rate/hour $30 Y oungstown has a tradition al cost sys tem. It calc ulates a p lant-wide overhead rate by dividing total overhead costs by total direct labor hours. Assume‚ for the calculations below‚ that plant overhead is a committed (fixed) cost during
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managers to have a sound knowledge of cost behaviour ie fixed costs‚ variable costs‚ semi-variable costs and sunk costs. Answer: Understanding cost behaviour helps manager in anticipation of changes in cost when there is a change in their activities like production‚ sales‚ inventory pile up etc. It provides good assistance in planning‚ cost management and decision making. A number of behaviour patterns exist ranging from fixed to variable and from linear to curvilinear. Many cost predictions
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contract costs you more for a cell-phone One thing I hear on an almost weekly basis is‚ “I can’t believe my cellphone bill was x amount of dollars this month!”. Yes‚ the big name carriers (Verizon‚ AT&T‚ Sprint‚ and T-Mobile) are what most people know of‚ but there are many more options in terms of price‚ coverage‚ plans‚ and more. And I will say this right off the bat; buying a $600 phone and joining a prepaid carrier‚ even the ones you see prepaid cards at the gas station‚ will save you more money
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Running Head: REDUCING COST Reducing Cost [Name of Customer] [Name of Institute] [English Literature] Reduce Cost Ways to reduce Cost In the unpredictable economic times prevalent contemporarily‚ organizations and economies all over the world are devising strategies that can prove effective in providing them sanctuary from the looming threat of increasing expenditures. However‚ there are a number of ways through which these expenses can be controlled in an intelligent and less intimidating
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than the cost of capital. The cost of capital is the rate of return that capital could be expected to earn in an alternative investment of equivalent risk. If a project is of similar risk to a company’s average business activities it is reasonable to use the company’s average cost of capital as a basis for the evaluation. A company’s securities typically include both debt and equity‚ one must therefore calculate both the cost of debt and the cost of equity to determine a company’s cost of capital
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return. 4) Is calculated by dividing average assets for a period by the amount of net income for the period. Question 9 0 / 1 point Expenditures capitalized as long-lived assets generally include those expenditures that: 1) are made for normal repairs to maintain the usefulness of the asset over a number of years. 2) are for items that have a physical life of more than a year‚ regardless of their cost. 3) are material and that have an economic benefit to the entity only
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