Purchase Solution

Reason of distinguishing variable & fixed costs

Not what you're looking for?

Ask Custom Question

Please help with the following questions. Provide at least 100 words.

Consider your own company, or the company of your choice, and name at least 5 direct and 5 indirect costs that this company has. For each one, also determine and state whether it is a fixed or variable cost. Why is it important for a company to distinguish between direct and indirect costs? Why is it important for a company to distinguish between fixed and variable costs?

Purchase this Solution
Solution Summary

The answer contains the reason for distinguishing between fixed cost and variable costs and also the examples of fixed costs and variable costs. It discusses why its important to distinguish the two. The explanation is given in 156 words.

Solution Preview

Problem: Consider your own company, or the company of your choice, and name at least 5 direct and 5 indirect costs that this company has. For each one, also determine and state whether it is a fixed or variable cost. Why is it important for a company to distinguish between direct and indirect costs? Why is it important for a company to distinguish ...

Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Motivation

This tests some key elements of major motivation theories.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

View More Free Quizzes
Related BrainMass Solutions

  • Classify variable and fixed costs, net present value NPV

    Classify the costs as variable costs or fixed costs. Explain the importance of distinguishing between variable and fixed costs. If business is expected to be steady from month to month, provide a monthly budget based on these figures.

  • Principles of Accounting and Types of Cost

    However, the per unit fixed costs will be decreased if the units of output is higher. d. What is a possible reason that line G-A increases at point A to a new horizontal line?

  • Fixed and Variable Costs

    447460 Fixed costs and few variable costs Some firms have a lot of fixed costs and few variable costs, while other firms are configured the other way around.

  • Hypothetical Numbers: The Decision of Whether to Shut Down

    Fixed costs are the reason that your business is losing money, but that in itself is not enough reason to shut down.

  • More rapid increase in net operating income

    The reason is that fixed costs do not change with increase in sales, only the variable costs change. So each extra unit sold will increase the operating income by the contribution margin.

  • Variable and Absorption Costing Unit Product Costs and Incom

    Variable manufacturing overhead (40,000 units x $2) $ 80,000 $ 960,000 Total Variable Costs Available for Sale $ 960,000 Less: Ending Inventory of Finished Goods (5,000 units x $24) $ 120,000 Variable Cost of Goods Sold

  • Varible and Absorption Costing

    Variable Costing Year 1 Year 2 Year 1 Year 2 Variable manufacturing costs 8 8 8 8 Fixed manufacturing overhead costs 15 12 Unit product cost 23 20 8 8 2.

  • Runway Fashions Inc.

    This is due to the fact that the absorption method includes all fixed manufacturing costs while in the variable costing concept, it includes only the variable costs of the inventory and fixed manufacturing costs incurred in September.

  • Fixed and variable cost

    358597 Accounting: Fixed and Variable Costs As I understand it, costs such as the salary of the vice president of transportation operations are variable because the more traffic you handle, the lowers your unit costs are.

View More Related Solutions