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    Fixed Cost to Variable Cost

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    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? Reply to your friend with the answers to her questions. In your reply, identify the types of costs Claire's Antiques would probably incur that are fixed.

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    Variable costs are those costs "which increase directly in proportion to the level of sales in dollars or units sold. Thus Variable costs are costs which changes directly in proportion to the level of sales in dollars or units sold. Depending on your type of business, some examples would be cost of goods sold, sales commissions, shipping charges, delivery charges, and costs of direct materials or supplies, wages of part-time or temporary employees, and sales or production bonuses.

    "Fixed costs," which remain ...

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