Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need to provide a response to this discussion: According to a study on corporatefinanceinstitue.com variable cost are costs that vary, and the change depends

I need to provide a response to this discussion:

According to a study on corporatefinanceinstitue.com variable cost are costs that vary, and the change depends on the company's production volume. Some variable cost examples are labor rate, supplies, commissions, and fees. On the contrary fixed cost does not change in relation to production volume. Insurance, utility bills, salaries, and loan repayments are examples of fixed cost. As a business owner it is important to understand fixed and variable cost to make better decision on saving and spending habits. Knowing your expenses and being able to manage the business financial will really set your business for success. I believe that both Fixed and variable cost can be detrimental to a business if they are not managed right because both is needed in the financial business structure. Variable can put your business financially behind if it does not manage right, you can't overspend on labor if what you are putting the labor on is not going to be profitable. Fixed cost can also be detrimental to a business if there is not enough revenue, for example it is easy to be behind on rent if you are making enough to cover the rent. Managing your fixed and variable cost will set your business for success.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Your conversation on fixed and variable expenses is very astute Its essential for entrepreneurs to c... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting Information for Decision-Making and Strategy Execution

Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young

6th Edition

137024975, 978-0137024971

More Books

Students also viewed these Accounting questions

Question

What are the three waves in computing?

Answered: 1 week ago

Question

List some methods of gaming performance indicators.

Answered: 1 week ago