Cost Descriptions Essay

The influence that total cost has on short run production cause variable costs to increase or decrease mirroring the total costs that incur as total costs are equal to variable costs. As production increases also, total costs will persist to increase as well. This occurs due to the fact that an increase/decrease in variable costs is required when raw materials, output and/or labour increases/decreases.

Unlike fixed cost variable cost you have some room to play, variable cost is all about changing inputs around to change output. Or as defined by Thomas and Maurice “variable input is one for which the level of

Variable Cost defines the cost of a single assembled product based on the materials consumed and labor invested directly in unit production. To illustrate our point, we can say that making a single baked potato with all of the fixings will cost $3.00 to produce (potato, sour cream, chives, plate, fork, napkin and labor). If we decide to go into the baked potato business, we must then sell these potatoes for at least $3.00 per unit. Any less would cause us to lose money on the endeavor. This cost cannot be made up by increasing volume of sales. Judy Koch discussed the fact that bulk purchases can benefit you reduce these variable costs. If we decided to purchase potato-making materials in larger quantities and hired more workers to produce these products, we could

This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).

According to this method, every unit of the product is assigned all direct, fixed, and variable costs. This method includes the cost of direct materials and labor as well as a portion of the overhead costs associated with it in the final costing of every unit of the product.

This paper will clarify the various terms used to describe costs, such as fixed, variable, direct, indirect, and sunk, giving examples of each to help a good understanding of current budget discussions. These concepts will help HR Management with an understanding of making effective budget decisions for its company, since they need to have clear and full knowledge of basic accounting language to grasp the concepts of the various accounting terms.

Mixed costs consist of a fixed component and a variable component. Understanding the mix of these essentials of a cost, one can predict how costs will change with different levels of activity. As the level of usage of a mixed cost item increases, the fixed component of the cost will not change, while the variable cost component will

Variable costs, on the other hand, are explicit expenses that vary with production output levels. As production output increases, variable expenses also increase. Variable costs that could be included in the manufacturing of dealybobs are the cost of the materials used in production. For example, if demand

Variable costs –Variable costs is costs that changes depending the amount of the level of output or sales by the business.

Taking pride in developing staff, implementing new technology, and assisting the leadership team in making financial decisions. Three basic fiscal management terms are fixed, variable, and semi-variable costs. Fixed costs are costs that do not vary in total when activity levels (or volume) of operation

Fixed costs consist of items such as rent, insurance, and lease payments. Variable costs change in relation to a company's activities; this holds true for manufacturers. Typical variable costs include direct labor, direct materials, supplies, and certain utilities. The fixed costs and variable costs form a firm's cost to manufacture its products and make up its cost structure (Pondent, 2012). This impacts its profitability.

All the costs by a company can be broken into two categories, fixed costs and variable costs. Costs that are independent of output are called fixed costs. Fixed costs remain constant throughout the relevant range and are usually considered sunk for the relevant range. Buildings and machinery are included inputs that cannot be adjusted in the short term. They are only fixed in relation to the quantity of production for a certain time period. The cost of all inputs is variable, in the long run.

The keen competition requires companies to consider the cost variable. But traditional budgeting method separates the cost into variable and fixed, put the emphasis on the variable cost and consider the fixed cost implacable.

VARIABLE COSTS:- A variable cost is a changing cost. In case of any changes the cost of the product changes. For example, the cost paid to a casual worker may vary. More hours done by the worker will pay him well

Direct costs are costs directly related to producing the products and services of a project. On the other hand, indirect costs are costs not directly related to a project’s products or services, but are indirectly related to performing the project.