The Fixed Period

Fixed Cost: Fixed cost as the name suggests implies any cost that remains fixed or does not change due to an increase or decrease in the amount of services or goods produced. It is a periodic cost that remains unchanged irrespective of the sales revenue or output, such as depreciation, insurance, wages, salaries, etc. The concept of fixed cost is used in short-term accounting. Fixed costs are those expenses that are necessary to be paid by a company, independent of any business activity that is

both variable and fixed cost elements. Mixed cost is also known as semi variable cost. Examples of mixed costs include electricity and telephone bills. A portion of these expenses are usually consists line rent. Line rent normally is fixed for each month. Variable portion consists units consumed or calls made. The relationship between mixed cost and level of activity can be expressed by the following equation or formula: Y = a + bX In this equation, * Y = The total mixed cost * a = The total fixed cost

production to China. Reconditioning has a fixed cost of $50,000 and a variable cost of $1,000 for every 1,000 sneakers produced.

       sunk costs.         incremental costs.         None of the above | 3. (TCO A) Depreciation of office buildings and office equipment is also known as (Points : 6) |        variable costs.        conversion costs.        product costs.        period costs. |

that there are substantial fixed costs of the period that were capitalized because production was so much higher than sales. The fixed costs is trapped on the balance sheet and will be expensed when the items are sold. See reconciliation in Excel for a visual on this. 4. Identify and explain any important ethical issues you see in this case. In determining the fixed costs per unit for the period for absorption costing (not needed for variable costing since the entire fixed cost is expensed as a cost

Making the right decision on whether to fix or float interest rates on a mortgage and for what period could be the difference of thousands paid to the bank in additional interest. To assist Marcus in this decision, this essay has looked at many variables. Firstly, and most importantly, what interest rates are expected to do in the short term future? Secondly, what are the advantages and disadvantages of both fixed and floating loans and how these will affect Marcus based on the information we know about

capital employed = 70,131. (IX) Net Asset: It can be found on the basis of fixed asset & net working capital. Net asset = Fixed Asset + Net working capital. Firm Net asset = 60,000 + 60,000 = 1,20,000. Industry Net asset = 41,143 + 28,988 = 70,131. (X) Working Capital & Current liability: Working capital can be found on the basis of the total capital employed. Firm Capital employed = Fixed asset + investment + current Asset – current liability. 1,20,000

(iii) Sales turn over of the merged plant to earn a profit of Rs. 75 lakhs. (iv) When the merged plant is working at a capacity to earn a profit of Rs. 75 lakhs what percentage increase in selling price is required to sustain an increase of 5% in fixed overheads. Solution : coming soon………. ------------------------------------------------- 3. A company is considering to select a project out of the two mutually exclusive projects. The Company’s cost of capital is 10% and the net after tax cash

Due to high investment in fixed asset the firm also need a high amount of debt in order to cover its expenses so the smooth run of business. Firm H. Health Maintenance Organisation: Health care organisations do business on cash basis. They provide proper medical services to different

expenditure. Support your answers with relevant journals/articles. Expenditure on fixed assets can be divided into capital expenditure and revenue expenditure. Capital expenditure includes costs incurred to get a fixed asset and any subsequent expenditure that increases the earning capacity. The cost of get a fixed asset not only includes the cost of purchases, it also includes additional costs incurred in bringing the fixed asset into its condition. Take for example, a delivery costs. Capital Expenditure