Purchase Solution

Antique fixed versus variable cost

Not what you're looking for?

Ask Custom Question

One member of your team emailed you and stated that she believes Claire's Antiques should work to convert the fixed costs to variable costs. She wants to know if this is a good idea. Why or why not? If not, then when would it be a good idea?

Purchase this Solution

Solution Summary

This solution is comprised of an explanation of fixed and variable costs within the context of using Claire's Antiques as an example.

Solution Preview

Please find below my opinions on your idea.

First, the behavior of costs - fixed or variable - depends on the cost object being observed and the time horizon. Second, in the long run, all costs become variable.

Next, the behavior of costs affects the profitability of a business. Hence, a company must earn enough from selling its products and providing its services to recover its fixed costs. This ability ...

Purchase this Solution


Free BrainMass Quizzes
Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Introduction to Finance

This quiz test introductory finance topics.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.