Variable Cost | Examples & Meaning - InvestingAnswers
2021年5月31日 · To bake cakes, the variable cost of Pierre’s Bakery might look like this: The variable cost to make all of the cakes is $72. If Pierre’s recipe makes 6 dozen cakes (72 cakes), the variable cost per unit would be $1. Variable cost/total quantity of output = x variable cost per unit of output Variable cost per unit = = $72/72 = $1.
Fixed Costs | Example & Definition - InvestingAnswers
2021年1月10日 · Total Cost vs. Fixed Cost vs. Variable Cost. Total cost is both the fixed cost and variable costs combined. Fixed costs typically remain stagnant until schedules or contracts change. Variable costs will change based on sales and production. This means that total costs will also change in line with these two numbers.
Semi-Variable Cost Definition & Example - InvestingAnswers
2020年8月28日 · How Does a Semi-Variable Cost Work? Semi-variable costs remain fixed up to a particular production volume. Beyond this volume, semi-variable costs increase in direct proportion to output. Wages, for instance, are semi-variable costs which multiply by 1.5 beyond 40 hours worked in a given week (also called time-and-a-half).
Break-Even Point | Example & Definition - InvestingAnswers
2020年8月27日 · Variable costs: costs that are dependent on the number of units produced (e.g. raw materials, hourly wages) Selling price : the price the product is sold for Using this data, the break-even point is calculated by dividing fixed costs by the contribution margin (selling price - the variable cost per unit).
Contribution Margin Definition & Example - InvestingAnswers
2020年8月28日 · The total variable cost of manufacturing a phone case comes to $1.00 (0.50 + 0.50) total per unit. If a total of 100 phone cases are manufactured, the total variable cost will come to $100, ($1.00 × 100 units) while manufacturing 10,000 phone cases will lead to a total variable cost of $10,000.
Cost Per Unit Definition & Example | InvestingAnswers
2019年10月1日 · Company XYZ's cost per unit is: $10,000 / 5,000 = $2 per unit. Often, calculating the cost per unit isn't so simple, especially in manufacturing situations. Usually, costs per unit involve variable costs (costs that vary with the number of units made) and fixed costs (costs that don't vary with the number of units made).
Operating Leverage Definition & Example - InvestingAnswers
2020年8月28日 · Operating Leverage = [Quantity x (Price - Variable Cost per Unit)] / Quantity x (Price - Variable Cost per Unit) - Fixed Operating Cost. To see how operating leverage works, let's assume Company XYZ sold 1,000,000 widgets for $12 each. It has $10,000,000 of fixed costs (equipment, salaried personnel, etc.). It only costs $0.10 per unit to make ...
Long-Run Average Total Cost (LRATC) - InvestingAnswers
2020年8月21日 · In this calculation, all inputs are considered to be variable, because, over the long term, no costs are considered fixed. In the long term, businesses can adapt and change elements of the production process, for example, by changing the supply chain, but the effects of those changes are not seen immediately.
Economies of Scale Definition & Example - InvestingAnswers
2020年8月28日 · Variable costs would increase to $1,500,000 (3 million widgets x $0.50 each = $1,500,000). But again, fixed costs would be unchanged at $500,000. Therefore, the total cost to make 3 million widgets would rise to $2,000,000, but the per-unit cost would drop to just $0.66. As production ramps up, total costs will also rise.
Direct Cost Definition & Example - InvestingAnswers
2020年8月28日 · Direct costs are variable costs associated with the inputs and labor required to produce a good or service. For instance, two direct costs associated with producing a copper pipe are the cost of the raw copper and the wages paid to the worker molding the copper into the shape of a pipe.