About 'masters degree costs'|...take shape: part time work whilst I complete my degree via the Open University and then next autumn I... (colleagues) and our costs will be minimal (PC's including necessary...
Ｉｎｔｒｏｄｕｃｔｉｏｎ Ｃｏｓｔｓ ａｒｅ ｔｈｅ ｒｅｑｕｉｒｅｄ ｅｘｐｅｎｓｅｓ ｔｈａｔ ｈａｖｅ ｔｏ ｂｅ ｐａｉｄ ｉｎ ｏｒｄｅｒ ｔｏ ｍａｉｎｔａｉｎ ａ ｂｕｓｉｎｅｓｓ. Ｅｄｄｉｓｏｎ Ｅｌｅｃｔｒｏｎｉｃｓ Ｃｏｍｐａｎｙ (ＥＥＣ) ｍｕｓｔ ｂｅ ｖｉｔａｌｌｙ ｉｎｔｅｒｅｓｔｅｄ ｉｎ ｍｅａｓｕｒｉｎｇ ｔｈｅ ｃｏｓｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｒｕｎｎｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ ｓｉｎｃｅ ｅｖｅｒｙ ｆａｃｔｏｒｙ ｏｆ ｐｒｏｄｕｃｔｉｏｎ ｗｉｌｌ ｈａｖｅ ｅｘｐｅｎｓｅｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｉｔ. Ｈａｖｉｎｇ ｋｎｏｗｌｅｄｇｅ ｏｆ ｔｈｅ ｃｏｓｔｓ ｏｆ ｒｕｎｎｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ ｉｓ ｖｉｔａｌ ｆｏｒ ｔｈｅ ｃｏｎｔｒｏｌｌｉｎｇ ａｎｄ ｐｌａｎｎｉｎｇ ｆｕｎｃｔｉｏｎｓ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｂｅｉｎｇ ｔｈｅ ｆｉｎａｎｃｉａｌ ａｎａｌｙｓｔ ｆｏｒ ＥＥＣ ｉｔ ｉｓ ｍｙ ｄｕｔｙ ｔｏ ｅｘｐｌａｉｎ ｔｈｅ ｄｉｆｆｅｒｅｎｔ ｃｏｓｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｄｉｓｃｕｓｓｅｄ ｂｅｌｏｗ ａｒｅ ｆｉｘｅｄ, ｖａｒｉａｂｌｅ, ａｎｄ ｍｉｘｅｄ ｃｏｓｔｓ ｗｈｉｃｈ ａｒｅ ｔｈｒｅｅ ｏｆ ｔｈｅ ｍａｉｎ ｅｘｐｅｎｓｅｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｒｕｎｎｉｎｇ ｔｈｅ ｏｐｅｒａｔｉｏｎｓ ｏｆ ＥＥＣ. Ｆｉｘｅｄ Ｃｏｓｔｓ Ｆｉｘｅｄ ｃｏｓｔｓ ａｒｅ ｔｈｅ ｃｏｓｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｒｕｎｎｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ ｔｈａｔ ｄｏ ｎｏｔ ｖａｒｙ ｗｉｔｈ ｔｈｅ ｃｈａｎｇｅｓ ｉｎ ｏｕｔｐｕｔ. Ｉｎ ｏｔｈｅｒ ｗｏｒｄ, ｔｈｅ ｆｉｘｅｄ ｃｏｓｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｓｔａｙ ｃｏｎｔｉｎｕｏｕｓ ｗｈｅｔｈｅｒ ｔｈｅｒｅ ａｒｅ ａｌｔｅｒａｔｉｏｎｓ ｉｎ ｔｈｅ ｌｅｖｅｌｓ ｏｆ ｐｒｏｄｕｃｔｉｏｎ ｗｅ ｐｕｔ ｏｕｔ ｏｒ ｎｏｔ. Ａｌｓｏ, ｔｈｅ ｆｉｘｅｄ ｅｘｐｅｎｓｅｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｈａｖｅ ｔｏ ｂｅ ｐａｉｄ ｒｅｇａｒｄｌｅｓｓ ｏｆ ｔｈｅ ｐｒｏｄｕｃｔｓ ｗｅ ｍａｎｕｆａｃｔｕｒｅ ｆｏｒ ｏｕｒ ｃｕｓｔｏｍｅｒｓ. Ｔｈｅｒｅｆｏｒｅ, ｔｈｅ ｌｅｖｅｌ ｏｆ ｓａｌｅｓ ｗｅ ｇｅｎｅｒａｔｅ ｗｉｌｌ ｎｏｔ ｃｈａｎｇｅ ｔｈｅ ｃｏｓｔ ｏｆ ｔｈｅ ｆｉｘｅｄ ｅｘｐｅｎｓｅｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｒｕｎｎｉｎｇ ｔｈｅ ｏｐｅｒａｔｉｏｎｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｔｈｅ ｆｉｘｅｄ ｃｏｓｔｓ ｔｈａｔ ｗｅ ｍａｙ ｉｎｃｕｒ ｗｈｉｌｅ ｒｕｎｎｉｎｇ ｔｈｅ ｏｐｅｒａｔｉｏｎｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ ｗｉｌｌ ｉｎｃｌｕｄｅ ｔｈｅ ｔａｘｅｓ ｗｅ ｐａｙ, ｔｈｅ ｅｍｐｌｏｙｅｅｓ ｗｈｏ ａｒｅ ｏｎ ａ ｓａｌａｒｙ, ａｎｄ ｔｈｅ ｒｅｎｔ ｗｅ ｐａｙ ｆｏｒ ｏｕｒ ｆａｃｉｌｉｔｙ (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ｖａｒｉａｂｌｅ Ｃｏｓｔｓ Ｖａｒｉａｂｌｅ ｃｏｓｔｓ ａｒｅ ｃｏｓｔｓ ｔｈａｔ ｗｉｌｌ ｂｅ ｆｌｅｘｉｂｌｅ ａｓ ａｌｔｅｒａｔｉｏｎｓ ｔａｋｅ ｐｌａｃｅ ｉｎ ｒｕｎｎｉｎｇ ｔｈｅ ｆｕｎｃｔｉｏｎｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｉｎ ｏｔｈｅｒ ｗｏｒｄｓ, ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｒｕｎｎｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ ｗｉｌｌ ｖａｒｙ ｉｎ ｒｅｌａｔｉｏｎ ｔｏ ｔｈｅ ｓａｌｅｓ ｏｒ ｐｒｏｄｕｃｔｓ ｗｅ ｄｉｒｅｃｔｌｙ ｍａｎｕｆａｃｔｕｒｅ ｆｏｒ ｏｕｒ ｃｕｓｔｏｍｅｒｓ. Ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｗｉｌｌ ｂｅ ａ ｄｉｒｅｃｔ ｉｎｄｉｃａｔｉｏｎ ｏｆ ｔｈｅ ｖｏｌｕｍｅ ｏｆ ｐｒｏｄｕｃｔｓ ｗｅ ｐｒｏｄｕｃｅ. Ｔｈｅ ｃｏｓｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｖａｒｉａｂｌｅ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｒｉｓｅ ｗｈｅｎ ｐｒｏｄｕｃｔｉｏｎ ｉｎｃｒｅａｓｅｓ ａｎｄ ｆａｌｌ ｗｈｅｎ ｐｒｏｄｕｃｔｉｏｎ ｄｅｃｒｅａｓｅｓ. Ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｔｈａｔ ｔｈｅ ｃｏｍｐａｎｙ ｍａｙ ｉｎｃｕｒ ｗｈｉｌｅ ｏｐｅｒａｔｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ ｉｎｃｌｕｄｅ ｕｎｐｒｏｃｅｓｓｅｄ ｍａｔｅｒｉａｌｓ ａｎｄ ａｎｙ ｌａｂｏｒ ｔｈａｔ ｉｓ ｄｉｒｅｃｔｌｙ ｔｉｅｄ ｔｏ ｍａｎｕｆａｃｔｕｒｉｎｇ ｏｕｒ ｐｒｏｄｕｃｔｓ (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ｍｉｘｅｄ Ｃｏｓｔｓ Ｍｉｘｅｄ ｃｏｓｔｓ ｗｉｌｌ ｂｅ ａ ｃｏｍｂｉｎａｔｉｏｎ ｏｆ ｂｏｔｈ ｆｉｘｅｄ ａｎｄ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ. Ｆｏｒ ｉｎｓｔａｎｃｅ, ｉｆ ａ ｖｅｈｉｃｌｅ ｉｓ ｎｅｅｄｅｄ ｉｎ ｒｅｌａｔｉｏｎ ｔｏ ｏｐｅｒａｔｉｎｇ ｔｈｅ ｂｕｓｉｎｅｓｓ ｔｈｉｓ ｗｏｕｌｄ ｂｅ ａｎ ｅｘａｍｐｌｅ ｏｆ ｍｉｘｅｄ ｃｏｓｔｓ. Ｔｈｅ ｇａｓ ｔｏ ｄｒｉｖｅ ｔｈｅ ｖｅｈｉｃｌｅ ｗｏｕｌｄ ｂｅ ｖａｒｉａｂｌｅ ｓｉｎｃｅ ａｃｃｏｒｄｉｎｇ ｔｏ ｈｏｗ ｍｕｃｈ ｇａｓ ｗａｓ ｎｅｅｄｅｄ ｔｏ ｇｅｔ ｗｈｅｒｅ ｔｈｅ ｖｅｈｉｃｌｅ ｎｅｅｄｅｄ ｔｏ ｇｏ ｗｏｕｌｄ ｂｅ ｖａｒｉｅｄ, ｂｕｔ ｔｈｅ ｐａｙｍｅｎｔｓ ａｎｄ ｉｎｓｕｒａｎｃｅ ｏｎ ｔｈｅ ｖｅｈｉｃｌｅ ｗｏｕｌｄ ｂｅ ｆｉｘｅｄ ｃｏｓｔｓ ｓｉｎｃｅ ｔｈｅｙ ｗｏｕｌｄ ｂｅ ｔｈｅ ｓａｍｅ ｅａｃｈ ｔｉｍｅ. Ｔｈｉｓ ｉｓ ｗｈｅｒｅ ｍｉｘｅｄ ｃｏｓｔｓ ｗｏｕｌｄ ｃｏｍｅ ｉｎ ｓｉｎｃｅ ｓｏｍｅ ｏｆ ｔｈｅ ｅｘｐｅｎｓｅｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｏｐｅｒａｔｉｎｇ ｔｈｅ ｖｅｈｉｃｌｅ ｗｏｕｌｄ ｂｅ ｆｉｘｅｄ ｃｏｓｔｓ ａｎｄ ｖａｒｉａｂｌｅ ｃｏｓｔｓ (Ａｃｃｏｕｎｔｉｎｇ Ｃｏａｃｈ, 2010). ＥＥＣ 2005 Ｊｏｕｒｎａｌ Ａｃｔｉｖｉｔｙ Ａｃｃｏｒｄｉｎｇ ｔｏ ｔｈｅ 2005 ｊｏｕｒｎａｌ ａｃｔｉｖｉｔｙ ｏｆ ＥＥＣ ｓｏｍｅ ｏｆ ｔｈｅ ａｒｅａｓ ｔｈａｔ ｗｏｕｌｄ ｂｅ ｃｌａｓｓｉｆｉｅｄ ａｓ ｆｉｘｅｄ, ｖａｒｉａｂｌｅ, ａｎｄ ｍｉｘｅｄ ｃｏｓｔｓ ｆｏｒ ｔｈｅ ｂｕｓｉｎｅｓｓ ｗｉｌｌ ｂｅ ｉｄｅｎｔｉｆｉｅｄ. Ｆｉｒｓｔ, ｔｈｅ ｆｉｘｅｄ ｃｏｓｔｓ ｆｒｏｍ ｔｈｅ 2005 Ｊｏｕｒｎａｌ Ｅｎｔｒｙ ｏｆ ＥＥＣ ａｒｅ ｉｎｓｕｒａｎｃｅ ｆａｃｔｏｒｙ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｓｉｘ, ｆａｃｔｏｒｙ ｓａｌａｒｉｅｓ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｅｉｇｈｔ, ｆａｃｔｏｒｙ ｐｒｏｐｅｒｔｙ ｔａｘ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｎｉｎｅ, ｄｅｐｒｅｃｉａｔｉｏｎ ｅｘｐｅｎｓｅ ｆａｃｔｏｒｙ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｅｌｅｖｅｎ, ｂａｄ ｄｅｂｔ ｅｘｐｅｎｓｅ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｔｗｅｎｔｙ-ｏｎｅ, ａｎｄ ｉｎｔｅｒｅｓｔ ｅｘｐｅｎｓｅ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｔｗｅｎｔｙ-ｅｉｇｈｔ. Ｎｅｘｔ, ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｆｒｏｍ ｔｈｅ 2005 Ｊｏｕｒｎａｌ Ｅｎｔｒｙ ｏｆ ＥＥＣ ａｒｅ ｓｅｌｌｉｎｇ ｅｘｐｅｎｓｅ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｔｈｒｅｅ ａｎｄ ｄｉｒｅｃｔ ｌａｂｏｒ ｆａｃｔｏｒｙ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｆｏｕｒｔｅｅｎ. Ｆｉｎａｌｌｙ, ｔｈｅ ｆｉｎａｌ ｃｏｓｔ ｆｒｏｍ ｔｈｅ 2005 Ｊｏｕｒｎａｌ Ｅｎｔｒｙ ｏｆ ＥＥＣ ａｒｅ ｍｉｘｅｄ ｃｏｓｔｓ ｗｈｉｃｈ ａｒｅ ａｄｍｉｎｉｓｔｒａｔｉｖｅ ｅｘｐｅｎｓｅ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｆｏｕｒ, ｓｕｐｐｌｉｅｓ ｆａｃｔｏｒｙ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｆｉｖｅ, ｉｎｄｉｒｅｃｔ ｌａｂｏｒ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｓｅｖｅｎ, ｍａｉｎｔｅｎａｎｃｅ ｆａｃｔｏｒｙ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｔｅｎ, ａｎｄ ｕｔｉｌｉｔｉｅｓ ｆａｃｔｏｒｙ ｗｈｉｃｈ ｉｓ ｎｕｍｂｅｒ ｔｗｅｌｖｅ. Ｔｈｅｒｅ ａｒｅ ｏｔｈｅｒ ｉｔｅｍｓ ｏｎ ｔｈｅ 2005 Ｊｏｕｒｎａｌ ｏｆ ＥＥＣ, ｂｕｔ ｎｏｎｅ ｆａｌｌ ｉｎｔｏ ｔｈｅ ｃａｔｅｇｏｒｉｅｓ ｏｆ ｆｉｘｅｄ, ｖａｒｉａｂｌｅ, ｏｒ ｍｉｘｅｄ ｃｏｓｔｓ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ (Ｊｏｕｒｎａｌ Ｅｎｔｒｉｅｓ, 2005). Ｆｉｘｅｄ Ｃｏｓｔｓ Ｉｎｃｒｅａｓｅ ｏｒ Ｄｅｃｒｅａｓｅ Ａｓ ｐｒｅｖｉｏｕｓｌｙ ｓｔａｔｅｄ, ｆｉｘｅｄ ｃｏｓｔｓ ａｒｅ ｔｈｅ ｅｘｐｅｎｓｅｓ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｔｈａｔ ｗｉｌｌ ｓｔａｙ ｃｏｎｔｉｎｕｏｕｓ ｄｅｓｐｉｔｅ ａｎｙ ａｌｔｅｒａｔｉｏｎｓ ｉｎ ｔｈｅ ａｃｔｉｖｉｔｙ ｌｅｖｅｌ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｔｈｅ ｒａｔｅ ｏｆ ｔｈｅｓｅ ｅｘｐｅｎｓｅｓ ｗｉｌｌ ｎｏｔ ｂｅ ｃｈａｎｇｅｄ ｂｙ ｔｈｅ ａｃｔｉｖｉｔｉｅｓ ｗｉｔｈｉｎ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｔｈｅ ｔｏｔａｌ ａｍｏｕｎｔ ｏｆ ｆｉｘｅｄ ｃｏｓｔｓ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｂｕｓｉｎｅｓｓ ｗｉｌｌ ｒｅｍａｉｎ ｃｏｎｔｉｎｕｏｕｓ ｅｖｅｎ ａｓ ｔｈｅ ｌｅｖｅｌ ｏｆ ａｃｔｉｖｉｔｉｅｓ ｉｎｃｒｅａｓｅ ａｎｄ ｄｅｃｒｅａｓｅ, ｂｕｔ ｉｆ ｃｈａｎｇｅｓ ｉｎ ｐｒｉｃｅｓ ｗｅｒｅ ｔｏ ｏｃｃｕｒ ｏｎ ｔｈｅ ｐｒｏｄｕｃｔｓ ｗｅ ｍａｎｕｆａｃｔｕｒｅ ｔｈｉｓ ｗｏｕｌｄ ｃａｕｓｅ ｔｈｅ ｆｉｘｅｄ ｃｏｓｔｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ ｔｏ ｂｅ ｉｎｆｌｕｅｎｃｅｄ. Ａ ｖｅｒｙ ｇｏｏｄ ｅｘａｍｐｌｅ ｏｆ ｆｉｘｅｄ ｃｏｓｔｓ ｔｈｅ ｃｏｍｐａｎｙ ｍａｙ ｈａｖｅ ｔｏ ｐａｙ ｉｓ ｒｅｎｔ ｏｎ ｔｈｅ ｆａｃｉｌｉｔｙ ｗｅ ｕｓｅ ｔｏ ｍａｎｕｆａｃｔｕｒｅ ｏｕｒ ｐｒｏｄｕｃｔｓ. Ｈｏｗｅｖｅｒ, ｃｏｎｆｕｓｉｏｎ ｃａｎ ｂｅ ｃｒｅａｔｅｄ ｉｆ ｆｉｘｅｄ ｃｏｓｔｓ ａｒｅ ｃｏｎｖｅｙｅｄ ｏｎ ａ ｐｅｒ ｕｎｉｔ ｂａｓｉｓ. Ｔｈｉｓ ｉｓ ｂｅｃａｕｓｅ ｗｉｔｈ ｃｈａｎｇｅｓ ｉｎ ａｃｔｉｖｉｔｙ ｌｅｖｅｌｓ ｏｎ ａ ｐｅｒ ｕｎｉｔ ｂａｓｉｓ ｔｈｅ ａｖｅｒａｇｅ ｆｉｘｅｄ ｃｏｓｔｓ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｂｕｓｉｎｅｓｓ ｗｉｌｌ ｉｎｖｅｒｓｅｌｙ ｉｎｃｒｅａｓｅ ａｎｄ ｄｅｃｒｅａｓｅ. Ｅｖｅｎ ｔｈｏｕｇｈ ｃｏｓｔｓ ｗｉｌｌ ｂｅ ｖａｒｉｅｄ ｏｎ ａ ｐｅｒ ｕｎｉｔ ｂａｓｉｓ, ｒｅａｌｉｚａｔｉｏｎ ｉｓ ｔｈａｔ ａｎｙ ｃｏｓｔｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ａ ｃｏｓｔ ｄｒｉｖｅｒ, ｓｕｃｈ ａｓ ａ ｍａｃｈｉｎｅ, ｗｉｌｌ ｎｏｔ ｖａｒｙ. Ｆｏｒ ｉｎｓｔａｎｃｅ, ｉｆ ｏｐｅｒａｔｉｎｇ ａ ｍａｃｈｉｎｅ ｆｏｒ ａ ｇｉｖｅｎ ｐｅｒｉｏｄ ｏｆ 8 ｈｏｕｒｓ ｃｏｓｔｓ ｔｈｅ ｃｏｍｐａｎｙ $1000, ｔｈｅ ｃｏｓｔ ｐｅｒ ｕｎｉｔ ｗｏｕｌｄ ｂｅ ｗｏｕｌｄ ｎｏｔ ｂｅ ｄｅｐｅｎｄｅｎｔ ｏｎ ｔｈｅ ａｍｏｕｎｔ ｏｆ ｉｔｅｍｓ ｇｅｎｅｒａｔｅｄ ｂｙ ｔｈｅ ｍａｃｈｉｎｅ ｓｉｎｃｅ ｔｈｅ ｆｉｘｅｄ ｃｏｓｔ ｗｏｕｌｄ ｓｔｉｌｌ ｂｅ $1000 ｔｏ ｏｐｅｒａｔｅ ｔｈｅ ｍａｃｈｉｎｅ ｆｏｒ ｔｈｅ 8 ｈｏｕｒ ｐｅｒｉｏｄ (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ｖａｒｉａｂｌｅ Ｃｏｓｔｓ Ｉｎｃｒｅａｓｅ ｏｒ Ｄｅｃｒｅａｓｅ Ａｓ ｐｒｅｖｉｏｕｓｌｙ ｓｔａｔｅｄ, ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｒｅｌｅｖａｎｔ ｔｏ ｔｈｅ ｂｕｓｉｎｅｓｓ ｗｉｌｌ ｒｉｓｅ ａｎｄ ｆａｌｌ ａｓ ａｌｔｅｒａｔｉｏｎｓ ｂｅｃｏｍｅ ａｐｐａｒｅｎｔ ｉｎ ｔｈｅ ｐｒｏｄｕｃｔｉｖｉｔｙ ｏｆ ｐｒｏｄｕｃｔｓ ｗｅ ｐｒｏｄｕｃｅ. Ｔｈｕｓ, ａｓ ｔｈｅ ｌｅｖｅｌｓ ｏｆ ａｃｔｉｖｉｔｙ ｗｉｔｈｉｎ ｔｈｅ ｂｕｓｉｎｅｓｓ ｉｎｃｒｅａｓｅ ｏｒ ｄｅｃｒｅａｓｅ ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔ ａｍｏｕｎｔ ｔｏ ｐｒｏｄｕｃｅ ｏｕｒ ｐｒｏｄｕｃｔｓ ｗｉｌｌ ｉｎｃｒｅａｓｅ ｏｒ ｄｅｃｒｅａｓｅ. Ｗｈｅｎ ａｐｐｌｙｉｎｇ ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｏｎ ａ ｐｅｒ ｕｎｉｔ ｂａｓｉｓ, ｔｈｉｓ ｗｉｌｌ ｂｅ ｄｉｆｆｅｒｅｎｔ ｉｎ ｒｅｇａｒｄｓ ｔｏ ｔｈｅ ｐｅｒ ｕｎｉｔ ｖａｒｉａｂｌｅ ｃｏｓｔ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｏｕｒ ｐｒｏｄｕｃｔｓ. Ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｗｉｌｌ ｓｔａｙ ｃｏｎｔｉｎｕｏｕｓ ｏｎ ａ ｐｅｒ ｕｎｉｔ ｂａｓｉｓ ａｓ ａｃｔｉｖｉｔｙ ｌｅｖｅｌｓ ｗｉｔｈｉｎ ｔｈｅ ｂｕｓｉｎｅｓｓ ｉｎｃｒｅａｓｅ ｏｒ ｄｅｃｒｅａｓｅ. Ｉｎ ｏｔｈｅｒ ｗｏｒｄｓ, ｉｆ ＥＥＣ'ｓ ａｍｏｕｎｔ ｏｆ ｓａｌｅｓ ｗｅｒｅ ｔｏ ｄｅｃｒｅａｓｅ ｔｈｅ ｔｏｔａｌ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｗｏｕｌｄ ｄｅｃｒｅａｓｅ, ｂｕｔ ｔｈｅ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｐｅｒ ｕｎｉｔ ｗｏｕｌｄ ｓｔａｙ ｕｎｃｈａｎｇｅｄ (Ｇａｒｒｉｓｏｎ, Ｎｏｒｅｅｎ, & Ｂｒｅｗｅｒ, 2010). Ｆｏｒ ｉｎｓｔａｎｃｅ, ｉｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｅｒｅ ｔｏ ｍａｎｕｆａｃｔｕｒｅ ｏｎｅ ｐｒｏｄｕｃｔ ｕｎｉｔ ｔｈａｔ ｔｈｅ ｔｏｔａｌ ｃｏｓｔ ｏｆ ｍａｔｅｒｉａｌ ｗａｓ $10.00 ｔｏ ｐｒｏｄｕｃｅ ｉｔ, ｔｈｅｎ ｔｈｅ ｔｏｔａｌ ｖａｒｉａｂｌｅ ｃｏｓｔ ｏｆ ｐｒｏｄｕｃｉｎｇ 100 ｕｎｉｔ ｗｏｕｌｄ ｂｅ $100, ｂｕｔ ｉｎ ｒｅｇａｒｄｓ ｔｏ ｔｈｅ ｕｎｉｔ ｖａｒｉａｂｌｅ ｃｏｓｔ ｉｔ ｗｏｕｌｄ ｒｅｍａｉｎ ｔｈｅ ｓａｍｅ ｗｈｉｃｈ ｉｓ $10.00 (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ａｄｖａｎｔａｇｅｓ ａｎｄ Ｄｉｓａｄｖａｎｔａｇｅ ｏｆ Ｆｉｘｅｄ Ｃｏｓｔｓ Ｔｈｅ ａｄｖａｎｔａｇｅｓ ｏｆ ｈａｖｉｎｇ ｍｏｓｔ ｅｘｐｅｎｓｅｓ ｆｉｘｅｄ ｉｎｃｌｕｄｅ ａ ｃｏｎｓｉｓｔｅｎｔ ｓｔｒｕｃｔｕｒｅ ｉｎ ｒｅｇａｒｄ ｔｏ ａｃｃｏｕｎｔｉｎｇ ｆｏｒ ａｌｌ ｅｘｐｅｎｓｅｓ. Ｔｈｅ ｆｉｎａｎｃｉａｌ ｒｅｐｏｒｔｓ ｗｉｌｌ ｂｅ ｓｔａｎｄａｒｄｉｚｅｄ ｒｅｇａｒｄｉｎｇ ｔｈｅ ｍｏｎｔｈｌｙ ｅｘｐｅｎｓｅｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｉｔ ｗｉｌｌ ｂｅ ｅａｓｉｅｒ ｔｏ ｄｅｃｉｄｅ ｈｏｗ ｍａｎｙ ｐｒｏｄｕｃｔｓ ｗｅ ｎｅｅｄ ｔｏ ｓａｌｅ ｆｏｒ ａ ｇｉｖｅｎ ｍｏｎｔｈ ｔｏ ｇｅｎｅｒａｔｅ ａ ｐｒｏｆｉｔ. Ｂｕｔ, ａ ｄｉｓａｄｖａｎｔａｇｅ ｉｎ ｈａｖｉｎｇ ｍｏｓｔ ｃｏｓｔｓ ｆｉｘｅｄ ｉｓ ｔｈａｔ ｉｆ ａ ｓｕｒｐｒｉｓｉｎｇ ｉｎｃｒｅａｓｅ ｃｏｍｅｓ ｉｎｔｏ ｐｌａｙ ｉｎ ｔｈｅ ｄｅｍａｎｄ ｆｏｒ ａｎｙ ｏｆ ｔｈｅ ｐｒｏｄｕｃｔｓ ｗｅ ｍａｎｕｆａｃｔｕｒｅ ａ ｓｈｉｆｔ ｉｎ ｔｈｅ ｅｑｕａｌｉｚｅｄ ｓｔａｂｉｌｉｔｙ ｏｆ ｍａｎｕｆａｃｔｕｒｉｎｇ ｏｕｒ ｐｒｏｄｕｃｔｓ ｃｏｕｌｄ ｏｃｃｕｒ. Ｗｅ ｗｏｕｌｄ ｔｈｅｎ ｂｅ ｉｎｃａｐａｂｌｅ ｏｆ ｇｅｎｅｒａｔｉｎｇ ｔｈｅ ｄｅｍａｎｄｅｄ ｐｒｏｄｕｃｔ ｉｎ ａｎ ａｃｃｕｒａｔｅ ａｍｏｕｎｔ ｏｆ ｔｉｍｅ ｆｏｒ ｏｕｒ ｃｕｓｔｏｍｅｒｓ. Ｃｏｎｖｅｒｓｅｌｙ, ｉｆ ａ ｓｉｔｕａｔｉｏｎ ｏｃｃｕｒｒｅｄ ｗｈｅｒｅ ｔｈｅｒｅ ｗａｓ ａ ｄｅｃｌｉｎｅ ｉｎ ｓｅｌｌｉｎｇ ｏｕｒ ｐｒｏｄｕｃｔｓ, ｔｈｅｎ ｗｅ ｗｏｕｌｄ ｂｅ ｌｅｆｔ ｗｉｔｈ ｐｒｏｄｕｃｔｓ ｍａｎｕｆａｃｔｕｒｅｄ ａｎｄ ｎｏｔ ｓｏｌｄ. Ｔｈｅｎ ｗｅ ｗｏｕｌｄ ｎｅｅｄ ｔｏ ａｄｄ ｔｏ ｔｈｅ ａｍｏｕｎｔ ｏｆ ｐｒｏｄｕｃｔｓ ｂｅｉｎｇ ｓｏｌｄ ｔｏ ｍａｋｅ ｕｐ ｆｏｒ ｔｈｅ ｓａｌｅ ｄｅｃｒｅａｓｅ ｉｎ ｏｒｄｅｒ ｔｏ ｅａｒｎ ａ ｐｒｏｆｉｔ ｆｏｒ ｔｈｅ ｔｉｍｅ ｐｅｒｉｏｄ (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ａｄｖａｎｔａｇｅｓ ａｎｄ Ｄｉｓａｄｖａｎｔａｇｅｓ ｏｆ Ｖａｒｉａｂｌｅ Ｃｏｓｔｓ Ｔｈｅ ａｄｖａｎｔａｇｅｓ ｏｆ ｈａｖｉｎｇ ｍｏｓｔ ｃｏｓｔｓ ｖａｒｉａｂｌｅ ｉｓ ｔｈａｔ ｗｉｔｈ ｖａｒｉａｂｌｅ ｃｏｓｔｉｎｇ ｔｈｅ ｉｎｃｏｍｅ ｐｅｒｉｏｄ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｎｏｔ ｂｅ ｉｎｆｌｕｅｎｃｅｄ ｂｙ ｉｎｖｅｎｔｏｒｙ ｃｈａｎｇｅｓ. Ｗｈｅｎ ｔｈｅ ｃｏｍｐａｎｙ ｉｓ ｕｓｉｎｇ ｖａｒｉａｂｌｅ ｃｏｓｔｉｎｇ ｔｈｅ ｐｒｉｃｅｓ ｏｆ ｓｅｌｌｉｎｇ ｏｕｒ ｐｒｏｄｕｃｔｓ ａｎｄ ｔｈｅ ｐｒｏｆｉｔｓ ｗｅ ｇｅｎｅｒａｔｅ ｗｉｌｌ ｓｈｉｆｔ ｉｎ ｔｈｅ ｄｉｒｅｃｔｉｏｎ. Ａｌｓｏ, ｔｈｅ ｄａｔａ ｃｏｎｔａｉｎｅｄ ｉｎ ｃｏｓｔｓ ｒｅｌａｔｅｄ ｔｏ ｖａｒｉａｂｌｅ ｅｘｐｅｎｓｅｓ ａｒｅ ｅａｓｉｅｒ ｔｏ ｅｓｔｉｍａｔｅ ｉｎ ｒｅｇａｒｄｓ ｔｏ ｔｈｅ ｐｒｏｆｉｔａｂｉｌｉｔｙ ｏｆ ｐｒｏｄｕｃｔｓ. Ｈｏｗｅｖｅｒ, ｔｈｅｒｅ ａｒｅ ｄｉｓａｄｖａｎｔａｇｅｓ ｔｏ ｈａｖｉｎｇ ｍｏｓｔ ｃｏｓｔｓ ｖａｒｉａｂｌｅ. Ｏｎｅ ｍａｉｎ ｄｉｓａｄｖａｎｔａｇｅ ｉｓ ｔｈａｔ ｉｆ ｔｈｅ ｃｏｍｐａｎｙ ｔｒｉｅｓ ｔｏ ｅｘｅｒｃｉｓｅ ｖａｒｉａｂｌｅ ｃｏｓｔｉｎｇ ｉｎ ｉｔｓ ｅｘｔｅｒｎａｌ ｆｉｎａｎｃｉａｌ ｓｔａｔｅｍｅｎｔｓ ｗｅ ｗｉｌｌ ｒｕｎ ｔｈｅ ｒｉｓｋ ｏｆ ｎｏｔ ｃｏｎｆｏｒｍｉｎｇ ｔｏ ｔｈｅ Ｇｅｎｅｒａｌｌｙ Ａｃｃｅｐｔｅｄ Ａｃｃｏｕｎｔｉｎｇ Ｐｒｉｎｃｉｐｌｅｓ (ＧＡＡＰ) ｒｅｌａｔｅｄ ｔｏ ｏｕｒ ｆｉｎａｎｃｉａｌ ｒｅｐｏｒｔｉｎｇ. Ｔｈｉｓ ｉｓ ｂｅｃａｕｓｅ ｌａｗｓ ｒｅｌａｔｅｄ ｔｏ ｆｉｌｉｎｇ ｔａｘｅｓ ｒｅｑｕｉｒｅ ｔｈｅ ｐｒａｃｔｉｃｅ ｏｆ ｓｏｍｅ ｔｙｐｅ ｏｆ ａｂｓｏｒｐｔｉｏｎ ｃｏｓｔｉｎｇ, ｌｉｋｅ ｍａｎｕｆａｃｔｕｒｉｎｇ ｃｏｓｔｓ, ｔｏ ｆｉｌｌ ｏｕｔ ｉｎｃｏｍｅ ｔａｘ ｒｅｌａｔｅｄ ｆｏｒｍｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ. Ｂｕｔ, ｖａｒｉａｂｌｅ ｃｏｓｔｉｎｇ ｃａｎ ｂｅ ｅｍｐｌｏｙｅｄ ｂｙ ｍａｎａｇｅｍｅｎｔ ｆｏｒ ｉｎｔｅｒｎａｌ ｒｅｐｏｒｔｉｎｇ. Ａｌｓｏ, ａｎｏｔｈｅｒ ｄｉｓａｄｖａｎｔａｇｅ ｉｓ ｔｈａｔ ｗｈｅｎ ｓａｌｅｓ ａｒｅ ｈｉｇｈｅｒ ｔｈａｎ ｐｒｏｄｕｃｔｉｏｎ ａ ｇｒｅａｔｅｒ ｐｒｏｆｉｔ ｉｎ ｒｅｌａｔｉｏｎ ｔｏ ｔｈｉｓ ｍａｙ ｄｅｃｅｉｖｅ ｍａｎａｇｅｍｅｎｔ ｉｎｔｏ ｍａｋｉｎｇ ｉｎａｐｐｒｏｐｒｉａｔｅ ｄｅｃｉｓｉｏｎｓ ｒｅｇａｒｄｉｎｇ ｐｒｏｄｕｃｔｉｏｎ ｌｅｖｅｌｓ ａｓｓｏｃｉａｔｅｄ ｗｉｔｈ ｓａｌｅｓ (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ｃｏｎｃｌｕｓｉｏｎ Ｉｔ ｉｓ ｅｖｉｄｅｎｔ ｔｈａｔ ｔｈｅ ｉｍｐａｃｔ ｏｆ ｐｒｏｆｉｔａｂｉｌｉｔｙ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｉｍｐａｃｔｅｄ ｂｙ ａｌｌ ｃｏｓｔｓ ｄｉｓｃｕｓｓｅｄ ｔｈｒｏｕｇｈｏｕｔ ｔｈｉｓ ｐａｐｅｒ. Ｒｅｓｐｅｃｔｉｖｅ ｔｏ ｆｉｘｅｄ ｃｏｓｔ, ｉｔ ｓｈｏｕｌｄ ｂｅ ｕｎｄｅｒｓｔｏｏｄ ｔｈａｔ ｔｈｅ ｍｏｒｅ ｐｒｏｄｕｃｅｄ ａｔ ａ ｆｉｘｅｄ ｒａｔｅ ｂｙ ｔｈｅ ｃｏｍｐａｎｙ ｔｈｅ ｆｅｗｅｒ ｅａｃｈ ｐｒｏｄｕｃｔ ｐｅｒ ｕｎｉｔ ｗｉｌｌ ｃｏｓｔ ａｎｄ ｔｈｅ ｖｏｌｕｍｅ ｏｆ ｓａｌｅｓ ｆｏｒ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｂｅ ｂｅｔｔｅｒ. Ａｓ ｉｔ ｒｅｌａｔｅｓ ｔｏ ｃｏｖｅｒｉｎｇ ｔｈｅ ｔｏｔａｌ ｃｏｓｔｓ ｉｎｃｕｒｒｅｄ ｗｉｔｈ ｔｈｅ ｏｐｅｒａｔｉｏｎｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ ｔｈｅ ｔｏｔａｌ ｆｉｘｅｄ ａｎｄ ｐｅｒ ｕｎｉｔ ｃｏｓｔ ｗｉｌｌ ｂｅ ｕｓｅｆｕｌ ｉｎ ｒｅｇａｒｄｓ ｔｏ ｐｒｉｃｉｎｇ ｏｕｒ ｐｒｏｄｕｃｔｓ ａｎｄ ｕｎｄｅｒｓｔａｎｄｉｎｇ ｔｈｅ ｄｅｍａｎｄｓ ｏｆ ｉｎｃｏｍｅ ｗｅ ｒｅｑｕｉｒｅ. Ｉｎ ｄｅｔｅｒｍｉｎｉｎｇ ｗｈａｔ ｄｅｇｒｅｅ ｏｆ ｓａｌｅｓ ａｒｅ ａｌｌｏｃａｔｅｄ ｔｏ ｆｉｘｅｄ, ｖａｒｉａｂｌｅ, ｏｒ ｍｉｘｅｄ ｃｏｓｔｓ, ｔｈｅ ｖｏｌｕｍｅ ｏｆ ｓａｌｅｓ ｒｅｌａｔｅｄ ｔｏ ｐｒｏｐｏｒｔｉｏｎ ｏｆ ｔｈｅｓｅ ｃｏｓｔｓ ｗｉｌｌ ｂｅ ｄｉｒｅｃｔｌｙ ｉｎｆｌｕｅｎｃｅｄ ｂｙ ｔｈｅ ｎｅｔ ｉｎｃｏｍｅ ｔｈｅ ｃｏｍｐａｎｙ ｇｅｎｅｒａｔｅｓ. Ｉｎ ｏｒｄｅｒ ｔｏ ｅｎｓｕｒｅ ａｐｐｒｏｐｒｉａｔｅ ｓｕｂｍｉｓｓｉｏｎ ｒｅｌａｔｅｄ ｔｏ ｔｈｅ ａｃｃｏｕｎｔｉｎｇ ｐｒｏｃｅｓｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ, ｔｈｅ ｍｉｘｅｄ ｃｏｓｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ ｗｉｌｌ ｒｅｑｕｉｒｅ ａｃｃｕｒａｔｅ ｓｅｇｒｅｇａｔｉｏｎ ｔｈａｎ ｔｈａｔ ｏｆ ｔｈｅ ｆｉｘｅｄ ａｎｄ ｖａｒｉａｂｌｅ ｃｏｓｔｓ ｏｆ ｔｈｅ ｃｏｍｐａｎｙ (Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ, 2009). Ｏｎｃｅ ｔｈｅｓｅ ｃｏｓｔｓ ａｒｅ ｕｎｄｅｒｓｔｏｏｄ ａｎｄ ｂｒｏｋｅｎ ｄｏｗｎ, ｍａｎａｇｅｍｅｎｔ ｗｉｌｌ ｂｅ ａｌｌｏｗｅｄ ｔｏ ｍａｋｅ ｂｅｔｔｅｒ ｄｅｃｉｓｉｏｎｓ ｒｅｇａｒｄｉｎｇ ｔｈｅ ｏｐｅｒａｔｉｏｎｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ ｉｎ ｏｒｄｅｒ ｔｏ ｅｎｓｕｒｅ ｔｈｅ ｃｏｍｐａｎｙ ｉｓ ｅａｒｎｉｎｇ ｒｅｔｕｒｎｓ ｗｉｔｈｉｎ ａｌｌ ｄｅｐａｒｔｍｅｎｔｓ ｏｆ ｔｈｅ ｂｕｓｉｎｅｓｓ. Ｒｅｆｅｒｅｎｃｅｓ Ａｃｃｏｕｎｔｉｎｇ Ｃｏａｃｈ. (2010) Ｗｈａｔ ａｒｅ ｍｉｘｅｄ ｃｏｓｔｓ? Ｒｅｔｒｉｅｖｅｄ ｆｒｏｍ ｈｔｔｐ://ｂｌｏｇ.ａｃｃｏｕｎｔｉｎｇｃｏａｃｈ.ｃｏｍ/ｍｉｘｅｄ-ｃｏｓｔｓ-ｆｉｘｅｄ-ｃｏｓｔｓ-ｖａｒｉａｂｌｅ-ｃｏｓｔｓ/ Ａｃｃｏｕｎｔｉｎｇ ｆｏｒ Ｍａｎａｇｅｍｅｎｔ. (2009). Ｃｏｓｔ ｃｌａｓｓｉｆｉｃａｔｉｏｎｓ ｆｏｒ ｐｒｅｄｉｃｔｉｎｇ ｃｏｓｔ ｂｅｈａｖｉｏｒ: Ｖａｒｉａｂｌｅ ａｎｄ ｆｉｘｅｄ ｃｏｓｔｓ. Ｒｅｔｒｉｅｖｅｄ ｆｒｏｍ ｈｔｔｐ://ｗｗｗ.ａｃｃｏｕｎｔｉｎｇｆｏｒｍａｎａｇｅｍｅｎｔ.ｃｏｍ/ｖａｒｉａｂｌｅ_ｃｏｓｔ_ａｎｄ_ｆｉｘｅｄ_ｃｏｓｔ.ｈｔｍ Ｇａｒｒｉｓｏｎ, Ｒ., Ｎｏｒｅｅｎ, Ｅ., & Ｂｒｅｗｅｒ, Ｐ. (2010). Ｍａｎａｇｅｒｉａｌ ａｃｃｏｕｎｔｉｎｇ, (13ｔｈ ｅｄ.). Ｎｅｗ Ｙｏｒｋ, ＮＹ: ＭｃＧｒａｗ-Ｈｉｌｌ Ｉｒｗｉｎ. Ｊｏｕｒｎａｌ Ｅｎｔｒｉｅｓ. (2005). Ｅｄｄｉｓｏｎ Ｅｌｅｃｔｒｏｎｉｃ Ｃｏｍｐａｎｙ. Ｒｅｔｒｉｅｖｅｄ ｆｒｏｍ ｈｔｔｐｓ://ｃａｍｐｕｓ.ｃｔｕｏｎｌｉｎｅ.ｅｄｕ/ｐａｇｅｓ/ＭａｉｎＦｒａｍｅ.ａｓｐｘ?ＣｏｎｔｅｎｔＦｒａｍｅ=/Ｈｏｍｅ/Ｐａｇｅｓ/Ｄｅｆａｕｌｔ.ａｓｐｘ |
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Masters Degree Costs - Blog Homepage Results
...take until I pass level 1 before I graduate from master degree course (that is what I am planning...語能力試験語彙トレーニングＮ２ and costs 1,800 yen. I…
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