Answer: Understanding cost behaviour helps manager in anticipation of changes in cost when there is a change in their activities like production, sales, inventory pile up etc. A portion of these expenses are usually consists line rent.
The company applies manufacturing overhead on the basis of machinehours. For each cost, indicate which of the following classifications best describe the cost. A total of 30 direct labor-hours and machine-hours were worked on the job. The second competitive advantage arena, demand advantages, is a bit less clear.
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Certainly no companies benefit from network effects or the difficulty of finding a substitute provider. Market is not really excited about the prospects of any IT hardware or services company. Again, the consumer segment accounts for only 3. In most organizations, the bulk of all expenses are fixed costs, and represent the overhead that an organization must incur to operate on a daily basis.
Here are a number of examples of variable costs, all in a production setting: Direct materials. Conversely, a high proportion of fixed costs requires that a business maintain a high sales level in order to stay in business.
Coming to the question, depreciation expense or depreciation cost can either be fixed or variable and this depends on the method adopted There are no supply advantages as each competitor is selling products and services that perform the same function.