Definition of fixed cost and variable cost

Definition of fixed cost and variable cost Fixed cost (FC): is a cost that remains constant, in total, regardless of changes in the level of activity. Fixed costs are not affected by changes in activity. Consequently, as the activity level rises and falls, total fixed costs remain constant unless influenced by some outside force. But fixed cost per unit decreases as the activity level rises and increases as the activity level falls. (Garrison etal., 2006, P49). Fixed costs include salaries of executives, interest expense, rent, depreciation, and insurance expenses. . Variable cost (VC): is a cost that varies, in total, in direct proportion o changes in the level activity. The activity can be expressed in many ways, such as units produced, units sold, miles driven, beds occupied, lines of print, hours worked and so forth. But variable cost per unit remains constant. ((Garrison etal., 2006, P48). Direct cost, indirect cost and overhead costs Direct costs: is a cost that can be easily and conveniently traced to the particular cost object under consideration. The concept of direct cost extends beyond just direct materials and direct labor. (Garrison etal., 2006, P50). Example: the salary of supervisor in marketing department is the direct cost for marketing department. The salary is likely the same each month not depend on the quantity of sales product. Indirect costs: is a cost that cannot be easily and conveniently traced to the particular cost object under consideration. (Garrison etal., 2006, P50).   Each business has its own method of allocating indirect costs to different products, sources of sales revenue and  business units.  Business managers and accounts should always keep an eye on the allocation methods used for indirect costs. Example: Depreciation on the production machine is also an indirect product cost, it stays the same each year not depend on the volume produced on the machine. Costs can be direct and indirect depending on the cost object: product, department,  and others such as division, customer, or geographic market. The total amount of the  cost remain the same as volume changes, it is fixed cost. It is a variable cost if the total cost change in proportion to the change in the activity or volume. Overhead costs: the indirect recurring costs of running a business that are not linked directly to the goods or service produced and sold. Overhead costs can include payments for the rent of premises, utility bills, and employees salaries. Controllable costs and uncontrollable costs Controllable cost: are those costs which can be regulated or controlled by specified member of an undertaking. Most of the variable costs are controllable costs. For example, direct material, direct labor and direct expenses à ¢Ã¢â€š ¬Ã‚ ¦are controlled by the lower level of management. Uncontrollable cost: can not be controlled by the specified member of the undertaking. Most of the fixed costs are uncontrollable cost. For example, factory rental expense, supervisors salary, depreciation. Evaluate the statement I have trouble with the terminology-direct costs, also called variable costs, are the ones that are controllable. Whereas indirect costs or overheads, also called fixed costs, are uncontrollable. Based on the definitions above, I strongly disagree with the statement because the delegate assumed wrongly about the cost. There are many ways to classified cost depending on the purpose of management. According to association with products, costs are divided into product costs and period costs. According to identifiably, costs are divided into direct cost and indirect cost. According to behavior, costs are divided into fixed cost, variable cost and semi- variable cost. According to controllability, costs are divided into controllable costs and uncontrollable costs. Direct cost can be fixed cost and variable cost depending on situations For example: the salary of supervisor in manufacture department is the direct cost for manufacture department. The salary is likely the same each month not depend on the quantity of product. It is a fixed cost of manufacture department. Raw material supply for manufacture department is a direct cost for department but it is a variable cost, total amount of supplies use in the department increases if the volume in the department increases. Indirect costs can be fixed costs and variable cost also: In opposition to direct cost, most of indirect cost is fixed cost. For example rental cost is indirect cost for part production, it is a fixed cost of manufacture department stay the same each month, its not depend on the number of product. But indirect cost can be variable cost also. The cost of electricity for administration of manufacture department is variable cost monthly depending on the number of electricity use more or less. Controllable cost and uncontrollable cost Most of variable costs are controllable. To illustrate: low level manager in manufacture product is the direct monitoring and control of production process. They can be managing the raw material use to create product and direct labors that mean control the number of employees needed to complete product. Management can organize the use of resources effectively in the short term. On the other hand, many of fixed costs are uncontrollable. They are imposed in terms of management such as business can not decide the rental fees of factory, the rent for his unit negotiated by higher management, or the rates dictated by the local authority. Question 2 1. Participative budgeting Budget preparation is the process by which organizational goals are translated into a plan that specifies the allocated resources, the selected processes, and the desired schedule for achieving these goals. There are two main types of budgeting: bottom-up budgeting and top-down budgeting. Participative budgeting is a method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by the managers supervisor, and any issues are resolved by mutual agreement. Manager Marketing Manager Sales Vice President Sales Vice President Finance President and CEO Vice President Production Cashier Controller Manager Manufacturing Manager Distribution All level of an organization should work together to create the budget. Each level in organization should contribute in the way that it best can in a cooperative effort to develop budget. Lower level management is responsible for setting the estimate of budget data in a participative system and submits them to the next higher level of management. Before the budget is accepted, they must be reviewed and evaluated by middle management before they are transferred to the organization. Advantage of participative budgeting Participative budgeting is relevant to all member of particular project, it helps to encourage all participants contribute idea to built a project effectively. Budget information is given clearly and fairly accurate because it use of the data available at the project management level Working motivation is higher when an individual directly involved in setting goals rather than goals imposed from above. Self-imposed budget made commitments to implement the goals. If the budget has been setting from top management, managers can say that budget is unreasonable or impractical to start, could not be performed. With participative budget, it does not happen when the managers set a budget for themselves. Disadvantage of participative budget Time consuming and costly because too many participants involved in setting budget project. The influence of top manager is limited over the budget process. However, when the lower-level managers plan the short budgets and mid-range budgets, outlining organizational policies and goals, they can influence the outcome by issuing a statement. Individual tend to overstate the real resource needs because they think that all budget will be cut in certain proportion by top manager and set a goal lower than actual for easy to achieve the goal. 2. Budget variance a. Definition of budget variance: Total budget variance is simply the difference between the actual cost of the input and its planned cost. Total variance = Price variance + Usage variance In standard costing systems, the total variance is broken down into price and usage variance. Price variance is the difference between the actual and standard unit price of an input multiplied by the number of unit used. Usage variance is the difference between the actual and standard quantity of inputs multiplied by the standard unit price of the input. Total variance = (AP x AQ) (SP x SQ) ACTUAL COST (AQ x AP) STANDARD COST (SQ x SP) STANDARD COST (SQ x SP) ACTUAL COST (AQ x AP) > FAVORABLE VARIANCE (ACTUAL UNFAVORABLE VARIANCE (ACTUAL > STANDARD) AQ means the actual quantity of input used to produce the output AP means the actual price of the input used to produce the output SQ means the standard quantity SP means the standard price Favorable variance and unfavorable variance are not equivalent to good and bad variance. The terms indicate the relationship of the actual price or quantities to the standards prices and quantities. b. Budget variance investigation Managers responsibility is carefully calculated the variance because that is a part of effective control of organization. In general, it is difficult to manage external sources of budget variance (government policy, stock market, fluctuation of exchange rateà ¢Ã¢â€š ¬Ã‚ ¦) rather than internal sources (raw material, cost per hour on direct labor). Management should know about the acceptable range of performance. If the budget has a favorable balance that means it has brought the profit to the company. Conducting an investigation to find out the reason why the variance of budget was favorable and it could be made more than in the future. If the variance is small, it should not be too worried. In fact, a little variance between actual budget and the projected figures is always happens. With the very small difference, the manager can ignore them, no need to adopt strong action because it does not bring terrible consequences for the business. So, with little difference, the best way to solve is simply putting it into stride. If the budget has unfavorable variance, head of department need to conduct an investigation to find out the main causes by external influence or internal influence. For example the increase of raw material usage per unit more than allowed standard because it was poor condition of machine or poor manufacturing. Find the cause and how to fix the problem; it is a good measure to prevent a similar situation may occur in the future. After having adverse variance the budget needs to rewrite or the budget needs to verify by internal audit. Question 3 Explain the term used in the statement 1. Committed fixed costs Committed fixed costs relate to the investment in facilities, equipment, and basic organizational structure. The two characteristics of committed fixed costs are that they are long term in natural, and they cannot be significantly reduced event for short periods of time without seriously impairing the profitably or long- run goals of the organization. Even if operations are interrupted or cut back, the committed fixed cost will still continue largely unchanged (Garrison etal., 2006, P190). For example: Vietnam airlines has total 80 aircraft, the company must pay money for depreciation, maintenance and insurance expense. The expense is not depend on the number of times the plane fly or the number of passenger in plane. It is a committed fixed cost. Decisions to acquire major equipment or to take on other committed fixed costs involve a long planning horizon. Management should make such commitments only after carefully analysis of the available alternatives. Once a decision is made to acquire committed resources, the company may be locked in to the decision for many years to come (Garrison etal., 2006, P191). For example the total committed fixed cost of renting the building for the hotel is very high and the company must commit to pay for it at least 5 years in Vietnam. Uneven revenue flows It is showed that the difference of demand (low or high) for product or service in different periods. At times the company is very busy and at others it suffers from very slack periods. The hospitality industry is often divided into two distinct seasons: high season and low season. The period time between two seasons can move and change each year. In high season, the hotel does not have enough room for customer and the room rate is very high that bring large of profit for the hotel. In contrast, in low season the hotel must reduce the price and apply promotion to attract tourist. It is a common situation of hotel and resort. The implication of the above situation for the company Many of our cost are committed fixed cost. Our revenue flows occur very unevenly. To be profitable we have to take a flexible approach to pricing The company in hospitality industry has large proportion of fixed cost for the initial investment so the break even point is also very high. Company will operate with high level of capacity before earning a profit. But when passed break even point the profit will increase rapidly. Committed fixed cost has a little effect to the level of costs in the short term. Revenue is the money the company receives for selling their product or service. It is calculated by taking the selling price and multiplying it by the number of units sold. Profit is the amount of money left over after costs have been covered. It is calculated by: total revenue minus total costs. Therefore, profits will not be improved by a greater emphasis on cost management of costs. The company will get profit if the revenue is maintained consistently above break even level. Due to the nature of leisure industry, the product is not in storage so the focus on revenue during the period low level of demand is the necessary task of this company. By adopting a flexible approach the company is adapting the price of the product or service to suit the situation of the company and the amount of money customers are willing to pay. But the given price must be greater than variable cost and above break event point. This pricing strategy is designed to attract as much business as possible when the company has spare capacity. The price will be increased for busy periods when the company can expect to operate near to full capacity. For example: In Vietnam, Da Nang has a long beautiful coastline. Seaside hotels have a high level of demand in the summer (from May to August), this time mainly to serve domestic tourist. The room rates are usually higher two times as much as normal. The hotels have maximum revenue in this period. In the low season from October to February next year, the hotel has launched promotions to attract tourist such as discount 30% room rate at Furama Resort or stay 2 night get 1 night free at Golden Sand Resort. In this case, at times of low volume an inflexible, cost orientated approach to pricing.

American Indians Essay -- essays research papers

“’Indians’: Textualism, Morality, and the Problem of History';, an essay written by Jane Tompkins, a professor of English at Duke University, outlines Tompkins dissatisfaction on how American Indians are portrayed throughout history. As children, we are taught that in “1492 Columbus sailed the ocean blue';, and that Peter Minuet bought all of Manhattan Island from the Indians for only twenty-four dollars worth of trinkets. In high school, we were taught that in World War II, the Germans were all heartless savages, and that the best course of action to end the war was to use the atomic bomb on Japan. It is seen that “the victor writes the history books.'; In other words, the dominant cultures and societies that conquer and overshadow lesser societies have the privilege of writing history. For example, if Germany won World War II, would the history books have mentioned the holocaust of the Jews? The problem with history is that history is defined in terms of the author’s point of view. There is no scientific process by which history is written; therefore we must discern what is the real truth versus someone’s biases and point of view. “The problem is that if all accounts of events are determined through and through by the observer’s frame of reference, then one will never know, in any given case, what really happened,'; (Tompkins, 410).   Ã‚  Ã‚  Ã‚  Ã‚  Tompkins researched s...

Sample Charter

The various costs include: building materials, landscaping and safety equipment, shipping, labor, temporary housing, and office facilities, travel, administrative expenses, staffing, training, and stocking of inventory. Project Manager: John Tare, 011-52-444-123-1234,john. [email  protected] Com Project Sponsor: Alex R. Fitzgerald, CEO Acme Home Improvements, [email  protected] Com Project Objectives: Deploy Acme's capabilities to meet the commercial and private construction market demands in the Mexico City area.Expand into international markets to meet the competition head-on and eat them, not only at home, but also abroad. To meet this goal and compete effectively Acme must open its first store in this major metropolitan area inside 12 months. To open this store within a year, Acme will build a project team that communicates effectively, operates efficiently, and is experienced in international ventures. The project team will construct a KICK sq Ft structure, with an additiona l ask sq Ft of exterior space for garden products.The store's design must excel in supporting each of Acme's five core business areas: plumbing/electrical supplies, building materials, hardware and tools, seasonal/garden/yard, and paint/wall coverings. The project team will construct a comprehensive plan upon which they will base execution. This plan encompasses all details from site preparation through hiring and training. The project team will carry the company up to opening day. It is critical that the team stay on task and on time. Approach: ; Establish a cross-cultural team of Acme corporate personnel from the U.S. And local Acme De Mexico staff to coordinate the project. Conduct competitive analysis of home improvement stores in Mexico City. ; Develop store design. ; Develop detailed construction schedule. ; Construct and finish store. ; Plan hiring requirements. ; Prepare hiring and training plan. ; Establish supply chain plans. ; Develop advertising, promotion, and merchandi sing plan. ; Train employees in compliance with Acme corporate policies, standards, procedures, and provide specific job activity training. ; Plan and execute store grand opening.

Published In Examinerlike Gestalt Therapy Which Was...

Published in examiner Like Gestalt therapy which was introduced in my previous article, brief psychology therapists are also concerned with the here and now. Their focus is on what a client can do to change what is happening now as quickly as possible. This type of therapy is known as third wave or third generation. The first type of therapy was psychoanalysis, which premised that all people were sick, or unhealthy and had to be cured. The second wave of psychology introduced the behaviorists or learning theorists. The behaviorists felt that like the previous theories of Freud, much of our behavior is instinctual; however, they also went further to say most of our behavior is learned. Pavlov s dogs is an example of behaviorist†¦show more content†¦Sources: My masters degree in psychology training http://www.associatedcontent.com/article/983184/psychology_and_the_african_violet_lady.html?cat=5 Chapters 27 28 In this paper I will discuss the topics and issues presented in chapters twenty seven and twenty eight of America, A Narrative History by Tindall and Shi. I will discuss Normalcy and the Great Depression while exploring the contradictions of the Roaring Twenties and the Jazz Age during the conservative Presidencies of Harding, Coolidge and Hoover. The decade of the twenties went from an economic boom defined by the Roaring Twenties to financial disaster of the Great Depression. Each of these Presidents was involved in the transitions found during the twenties. Wether or not they were personally responsible for what transpired during their individual tenure is open for debate with a few exceptions. My personal insight is, our Presidents of the time made some horrific mistakes and mishandled some policies both foreign and domestic that did not benefit the common citizen as they did big business. In 1920, after World War l, Warren Gamaliel Harding was elected President of the United States. His promise was a return to normalcy. The American people needed to hear this approach

The Effects Of Air Pollution On Human Health Essay

Objectives 1. To establish the definition of air pollution and pollutants and determine their chemical nature. 2. To identify the causes of Air pollution 3. To define air pollution in India with respect to law as stated in the Indian Constitution. 4. To describe the Supreme Court interjection due to Delhi’s pollution and its results. 5. To assess the air pollution level in Delhi and compare the levels before and after Diwali 6. To find the level of pollution caused by different sources and the data supporting it. 7. To analyze the level of pollution in Delhi by comparing it to prescribed limits prescribed by various institutions. 8. To study the effects of air pollution on human health by secondary data sources and interviews conducted by our group. 9. To study the effects of air pollution on the floral life. 10. To study the data given by the premier institution CPCB. 11. To find out about the measures taken by government after Great Delhi Smog (2016) and study the sustainable practices that can be or have been taken in accordance with air pollution. METHODOLOGY We will be measuring and analyzing the ambient air pollution of Delhi by the standards of Central Pollution Control Board, India. The parameters and standards we are taking is the concentration of the following pollutants : Prime focus areas of our paper : Average air pollution level in Delhi , Air quality index of Delhi , and specific focus on the effects of Diwali and burning of agricultural crops on theShow MoreRelatedEffects Of Air Pollution On Human Health1319 Words   |  6 PagesCareful What You Breathe In: Effects of Air Pollution on Human Health The idea that we, as a global community, are destroying the very earth we commonly share is something that takes time for people to fully understand. It takes research and a open mind to be knowledgeable about the environmental issues the human race is causing to planet earth, as well as the issues that it is causes to our personal health. Air pollution is a large problem that exists in the United States. However, the challengeRead MoreThe Effects Of Air Pollution On Human Health1874 Words   |  8 PagesAIR POLLUTION Do you know 3.3 million people die each year due to air pollution? According to Borenstein, â€Å"Air pollution kills more than HIV and malaria combined.† Both of these diseases have caused worry from many people. How come people do not seem as worried about air pollution? In a study conducted by Harvard University, they found that â€Å"the yearly death total will double to about 6.6 million a year by 2050† because of air pollution. Something needs to be done in order to control air pollutionRead MoreThe Effects Of Air Pollution On Human Health850 Words   |  4 Pagesincreasing, so does pollution. The debate associated with this contamination on the environment has to do with how much should be done to stop pollution, and whether or not this is a serious enough issue to be concerned with. Well, this issue should disturb people. The most frightening point about it is that these poisonous impurities infect the Earth in multiple forms, including air pollution and water pollution. The value of Earth is incomparable, and the presence of pollution devaluing it needsRead MoreThe Effects Of Air Pollution On Human Health And / Or The Environment Essay1780 Words   |  8 PagesAir pollution refers to a â€Å"broad range of contaminates† (Brimblecombe Atkins, 2013, p.20) found in the atmosphere that are harmful to human health and/or the environment. While air pollution can, at its most simplistic, be defined as â€Å"any input of chemical, aerosol, or particulate† (Blauvelt Gates, 2011, p. 17) found to be deleterious and airborne, the term can be subdivided in many ways by source, components, and mode of formation. (Blauvelt Gates, 2011, p. 17) Typically, an essential distinctionRead MoreEffects Of Outdoor Air Pollution And Its Effects On Human Health1405 Words   |  6 Pagespoor air quality due to outdoor air pollution and its’ effects on human health. I have examined numerous documents, learning about the anthropogenic causes of the air pollution in addition to studying the hazards the contaminated air presents to the public, particularly in urban areas. I have created a policy that I believe directly addresses the current needs of the atmosphere in order to continue to reduce the amount of pollution in the air we breathe, in turn improving our overall health. 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Air pollution occurs when pollutants are released into the atmosphere. It has both chronic and acute effects on human health which effects a number of different systems and organsFossil fuel combustion such as diesel fuel, coal, gasoline and natural gas is the main source of air pollution. Most of this

Analysis of Conformity and Group Influence in Twelve Angry...

Analysis of Conformity and Group Influence in Twelve Angry Men Introduction The film â€Å"Twelve Angry Men† directed by Sidney Lumet illustrates many social psychological principles. The tense, gripping storyline that takes place in the 1950s features a group of jurors who must decide unanimously whether a young man is guilty or innocent in the murder of his father. At the beginning, eleven of the twelve jurors voted guilty. Gradually, through some heated discussion, the jurors are swayed to a not-guilty verdict. Upon examination, the film highlights social psychology theories in areas of conformity and group influence. Theories and Application Conformity Conformity, a change in one’s behaviour or belief to correspond with others†¦show more content†¦Perhaps the power of the need to feel accepted is most evident in the character of juror number two, a rather meek and hesitant individual, who during several occasions of being confronted by more strong-willed or hostile jurors, displays quick retreat in his subtle opinions. Informative social influence is also apparent in â€Å"Twelve Angry Men†. Juror number twelve, a well-dressed, advertising businessman for â€Å"Rice Pops† exhibits a character that is easily-swayed by convincing arguments from both sides. He first changes his vote from guilty to not guilty after juror number five’s demonstration with the switchblade only to change his vote again after he is overwhelmed with â€Å"evidence that he is unable to arrange in order.† His inability to explain his reasons for his decisions to change his votes demonstrates the complication of the situation as well as his own feelings of incompetency (Myers, Spencer, amp; Jordan, 2009). Instead, juror number twelve relies on the arguments of other jurors and changes his votes according to the credibility of other’s judgments. Group Influence There is no doubt that people are often susceptible to conformity. However, another closer look at â€Å"Twelve Angry Men† reveals more than just social influences. 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Old Africa Vs New Africa Essay Research free essay sample

Old Africa Vs. New Africa Essay, Research Paper Old Africa vs. New Africa Aaron S On my essay about # 8220 ; Out of Africa # 8221 ; I will compare and contrast old Africa and new Africa. During the film Africa was under European power. There were merely independent states. European leaders dictated their authorities. Africa has since become independent. European power has greatly changed instruction over the old ages. White people are known as the extremely educated. Africans do non travel to school, alternatively they work on farms and make other labour. The environment hasn T changed much since European regulation, it is still rich with woods, comeuppances, and savannas. Most of Africa has learned to utilize their natural resources. Oil, Cu, gold, and diamonds are merely a few. Farming still plays a major function and is still the chief manner of life. White people for the most portion control excavation, which is one ground Africans farm. We will write a custom essay sample on Old Africa Vs New Africa Essay Research or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The husbandmans are found in the poorer states where the natural resources are non found. Health wasn T rhenium ally discussed in the film, except her turn with pox. However today in Africa when they dig into the rain forests they uncover things like Ebola and the AIDSs virus. The societal facet of Africa has changes a batch. Before society was dominated by the upper category white Europeans. Blacken Africans were at the underside. When control came to them they changed this. They are in upper and lower categories together now. Religion of Africa is a mix of Christians, Muslims, and tribal. Not much has changed at that place. The military where European ground forcess one time occupied Africa has changed in that today most of the African states have their ain military ground forcess. Race wise Africa hasn T changed much since the film. Much of the Sub-Sahara Africa was lived in by black Africans and the northern portion of Africa was place for the Arabs. Now Africa has so many communities where white people live. One state where the white people have a say in South Africa. 25 % of this state is white and the largest population.