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    Estimation techniques - fixed costs

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    You have been studying 'fixed' costs. You learned that a number of 'fixed' costs are actually mixed costs (variable and fixed). Write a two paragraph memo to your manager explaining some of the cost estimation techniques that can help determine the fixed and variable portion of each mixed cost (such as utility costs and maintenance costs). Your response should not be limited to just the definitions of fixed, variable, and mixed costs.

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    Solution Preview

    You have been studying 'fixed' costs. You learned that a number of 'fixed' costs are actually mixed costs (variable and fixed). Write a 2 paragraph memo to your manager to explain various cost estimation techniques that can help determine the fixed and variable portion of each mixed cost (such as utility costs, maintenance costs) and why it is relevant to more accurately understand the types of costs.

    Mixed cost
    According to the investopedia "Mixed cost is a cost that contains both variable and fixed cost elements. "For example, Salaries can include the basic salary which is a fixed cost and the incentives based on the sales making this part a variable expense. ...

    Solution Summary

    This solution explains cost estimation techniques, addressing variable portions of mixed cost as well as fixed

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