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Fixed Costs: Depreciation Expenses, Maintenance and Repairs, Amortization, Insurance, and Taxes - Case Study Example

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Fixed Costs: Depreciation Expenses, Maintenance and Repairs, Amortization, Insurance, and Taxes

(Meigs & Meigs, 1997)
Maintenance and Repairs Expenses: While using these Antique assets we will probably incur these costs as we will have to keep in running the assets and therefore we will need to repair them accordingly as well as make some necessary investment on that asset to maintain it. (Meigs & Meigs, 1997)
Insurance and Taxes: Whether they are new or Antique assets every assets has to be taxed and if we are using these assets for example the antique car we are using we have to pay the insurance on that so that are also considered as fixed cost which will probably incur. Taxes on antique items are a little bit lower as compared to new assets and the charges of insurance that is the Interest rate will probably be lower but the chances of running that assets are lower because risk is high and it can lead towards ineffective productivity. (Meigs & Meigs, 1997)
In my opinion it is not a good idea to uses Claire's assets to convert our fixed cost into variable cost as there are many fixed cost that are not convertible very easily in Claire's antique assets. The reason for not following this strategy is that no business can run without having a certain amount of fixed cost and there are many costs in those assets which can increase our expenses. ...Show more


Suppose Claire's Antique assets include Antique Furniture for office setup, the Antique car for the transportation purpose as well as the antique computer and telephone for office use. The types of fixed cost that Claire's antique would probably incur are the Depreciation expense, maintenance and repairs, Amortization, Insurance and Taxes…
Author : hkshlerin
Fixed Costs: Depreciation Expenses, Maintenance and Repairs, Amortization, Insurance, and Taxes essay example
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