We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Understanding of the Different Kinds of Cost: Variable, Fixed, and Mixed - Research Paper Example

Comments (0) Cite this document
Variable costs will be seen to change in a business scenario once the business varies its production levels, fixed costs cannot be varied in response to variances in the aggregate activity or firm’s output and mixed costs are those costs that possess both fixed and variable elements in them.

Download paper
Understanding of the Different Kinds of Cost: Variable, Fixed, and Mixed
Read TextPreview

Extract of sample
Understanding of the Different Kinds of Cost: Variable, Fixed, and Mixed

Understanding of the Different Kinds of Cost: Variable, Fixed, and Mixed

This is a memo set out to discuss costs in three fronts. That is, it will have a vivid focus on variable, fixed and mixed costs and these will be handled in the order in which they have been listed. Some of the known examples of variable costs may be with the inclusion of material costs, costs of labor and other business overheads that vary with different production levels. (investorwords.com, 2011) Thus, a variable cost is that cost that varies, in aggregate, with varying activity levels. The term activity can be referred to in different ways. These may include activities like the number of units that a business produces, number of units sold, miles that are driven, print lines, beds occupied, and the number of hours worked among others. Using the example aforementioned of direct materials, then, one can bring the bigger picture of what variable costs are. These direct costs vary in a direct manner to the magnitude of units that have been produced. A direct example may be used here as follows: Take a certain motor vehicle manufacturing company that requires a power battery per vehicle that they produce. If the number of vehicles produced is varied; such that there is a reduction in the number of vehicles produced in a given operation period, then the number of power batteries needed to serve these vehicles will vary proportionately. A decrease in vehicles manufactured by 15% will, therefore, lead to a 15% decrease in the costs of power batteries used. ...
b. Fixed Costs ‘Fixed costs’, on the other hand, refers to those costs that are related to the production of various inputs that are applied in a given organization, and which (inputs) cannot be varied in response to variances in the aggregate activity or firm’s output. This, however, will depend on a given production range. Fixed costs can as well be referred to as non-variable cost outlays. Thus, these costs remain fixed for a given volume range. They fluctuate beyond the set range of production, therefore. Fixed costs also related to a high extent to time. To this point of time dependence, thus, one can note in that in the long run; fixed costs can be varied. They may as well be viewed in two major sub-headings. These are; discretionary and committed. Discretionary fixed costs are those fixed costs that can be budgeted for by a given organization’s management or marketers. Committed costs, on the other hand, are those costs that a related to the buying of assets associated with capacity production. The major characteristic that can be applied in the identification of committed fixed costs is that of its predetermination and occurrence. These two identification factors of committed costs are alterable only in scenarios of other major decisions to change or reverse the prior commitment. They are also referred to as discretionary or managed costs that emanate from the decisions by the management. They can be reduced or incurred at the management’s discretion. (Khan and Jain, 2003 pp4-12) Examples from the EEC journal entries of fixed cost outlays may include plant and equipment amounting to 80,000,000, land amounting to 1,000,000, and depreciation factory amounting to 1,600,000. c. Mixed Costs Mixed costs are those costs that possess both fixed and ... Read More
Cite this document
  • APA
  • MLA
(“Understanding of the Different Kinds of Cost: Variable, Fixed, and Research Paper”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/52257-understanding-of-the-different-kinds-of-cost
(Understanding of the Different Kinds of Cost: Variable, Fixed, and Research Paper)
“Understanding of the Different Kinds of Cost: Variable, Fixed, and Research Paper”, n.d. https://studentshare.net/finance-accounting/52257-understanding-of-the-different-kinds-of-cost.
  • Cited: 0 times
Comments (0)
Click to create a comment
Hepatitis: Causes, Symptoms, Kinds
Acute viral hepatitis is a viral infection that has short-term duration. It occurs when people are infected initially by the virus and can range from being mild to severe (Gould 6). Sometimes, acute viral infection can lead to chronic infection (Women’s Health.gov).
11 Pages(2750 words)Research Paper
The Independent Variable and Dependent Variable
3). The topic we identify in our case is the effect of various activities of British American Tobacco (B.A.T) on the health of Kenyan citizens. These activities could include cigarette manufacturing, advertisement of their products, marketing and promotions.
3 Pages(750 words)Research Paper
The Effects of the Quality of Employees' Interaction with their Managers on the Quality of their Work
How far does it make any difference in performance?  The research came out with the findings that more or less good communication processes are one of the factors in organizational success. Quality of interaction is an independent variable here and quality of work in dependent variable.    Qualitative research was done with the help of an in-depth interview questionnaire.
27 Pages(6750 words)Research Paper
Kinds of Intelligence
In these cases, determining the kind of instruments and the recommendations it provides is the main factor why this kind of instruments, though similar in nature differs with their uses and the procedures. In fact, the main goal of these tests boils down to one thing- to determine the intelligence of a certain individual.
11 Pages(2750 words)Research Paper
What kinds of therapies/treatments do criminals with mental illnesses receive in the United States and in the United Kingdom And how are they similar and/or different
Mentally ill people are treated badly and their needs are ignored. Even in the social institutions like prisons, inmates with mental disorder are
10 Pages(2500 words)Research Paper
The different kinds of Technology being used in business
In the contemporary world of business, the most popular topic that we come across these days is of technology, the businesses having superior technology is being flourished faster than other companies, since use of technology diminish cost, amplify
10 Pages(2500 words)Research Paper
Research and discuss the differences between variable and fixed costs and provide examples of both
ry with the change in production level or sales volume such as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising. On the other hand, the variable components of the expense, in other words, called as
2 Pages(500 words)Research Paper
Mixed Methods - Mixed Methods Research
Social science and art yields better result when qualitative research method is used. On the other hand, science requires quantitative research for a high quality result. When these approaches are used together it is referred to as mixed research approach. This method
1 Pages(250 words)Research Paper
Kinds of probation
There are quite a number of types and nature of probations and they vary in their individual terms and conditions and with the kinds of crimes and cases in which they are involved. They include pretrial, informal, supervised/formal, community control, shock,
4 Pages(1000 words)Research Paper
Variable Costing and Samanta Shoes
Labor costs are directly proportional to production costs. Increase in the availability of workers will lead to a decrease in labor costs; hence production costs. Lower labor costs will lead to a decrease in shoe prices. The amount of labor will,
1 Pages(250 words)Research Paper
Let us find you another Research Paper on topic Understanding of the Different Kinds of Cost: Variable, Fixed, and Mixed for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us