Essay Week 4 Discussion Questions

Fixed costs are what it costs a company to run before they make any products irrespective of the level of activity e.g. rent & rates, insurance, salaries, utilities.

Semi-fixed, where costs are fixed for a given level of activity but change in steps when activity levels exceed or fall below these given levels.

Only the incremental costs and benefits are relevant. In particular, only the variable manufacturing overhead and the cost of the special tool are relevant overhead costs in this situation. The other manufacturing overhead costs are fixed and are not affected by the decision.

are costs that have already been incurred and cannot be changed by any decision made

While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas

16. Robert is deciding whether to remain in the home he has lived in for the past ten years, which is located very near his work, or to move

1.For which of the following products would job order costing be least likely to be used?

4. Contract Services: The costs of services performed by others with regard to research and development are expensed as incurred.

3. Depreciation: The moment a product is sold it is considered as used product and price of the product is less. There are some exceptions to this rule as land; gold etc. usually appreciates over time. For other products customers are actually buying products that will depreciate over time.

a) Fixed costs –Fixed costs are costs that constantly need to be paid by the business even if the business isn’t operating currently. For example this can be rent.

A common misconception made by management of a company is that a single definition of cost is ideally suited to all types of manufacturing decision. What a manager’s plan to produce must be well known to him and always taken into account where he fails to realize this, difficulty arises in determining the cost of production. This gives rise to two reasons for the difficulty in determining the cost of products produced. First, the relationship between the cost incurred and output produced is often difficult establish. Secondly, cost may be assembled, combined and reported in different ways.

A variable cost is a corporate expense that varies with production output. Variable costs are those costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases (Variable Cost, n.d.); in the case study for all cost per event such

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.

Fixed costs are those which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense, straight-line depreciation expense, etc.

In general, cost means the amount of expenditure (actual or notional) incurred on, or attributable to a given thing.