Cost Descriptors Memo for MBA 503

In our last Senior Management Team coming together I was asked to provide a clear definition of motley terms used which were introduced in our budget discussion. The ? exist build? terms I forget define atomic forage 18 placed, uncertain, semi-variable, direct, indirect, sunk, actual cost and opportunity be. Fixed CostsA fixed cost does not diverge. These be ongoing be which proceed relatively constant from calendar month to month. Examples of fixed be are rent, salaries, insurance. For example, our lease cost us $10,500 per month. This cost provide be fixed for the duration of the lease. variable quantity CostsVariable cost are cost that are directly relate to changes in production and are defined as the costs of goods sold, variable costs include raw materials, labor, and sales commissions. As peck of output increases so does the amount of materials needed as well(p) as the costs of shipping and the additional cost of paysheet for hourly staff. For example , when the deem of students increases from 6,000 a year to 7,000 a year, the costs of the production and shipment of the textbooks will increase. If the number of students decreases, the costs of production and shipment will also decrease. The costs will vary depending on the number of students. Semi-VariableSemi-variable costs, or mixed costs, are costs that are partially fixed and partially variable. For example, service course bills, copier lease and telephone bills, these can start of saturnine with a flat fee and incur a per-minute or another variable charge (going over the maximum number of copies for the copier) once a certain level is reached. The table at a lower place helps illustrate the differences in fixed, variable and semi-variable costs. OPERATIONAL COSTSFIXEDVARIABLESEMI-VARIABLELeaseTextbook production costsUtilitiesInsurance (building)Shipping chargesPhoneNon squelch SalariesHourly employee?s payrollCopier leaseSupplies (paper)Direct CostsDirect costs are those that are directly due(p) to the man! ufacturing of a product. For... If you want to get a full essay, lodge it on our website: OrderCustomPaper.com

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