Variable Cost Analysis Paper

The total cost of production of Sony’s new product is the addition of both fixed and variable costs. Fixed costs are assets within a business that are not used up or sold during the typical production course e.g. buildings and machinery. Variable costs are costs that fluctuate in time with the production output or sales revenue of a company such as Sony e.g. raw material and labour costs. Figure 1.1 shows how the total cost is composed of both fixed and variable costs.

Variable costs are expenses directly associated with the product or service e.g. raw materials, components, packaging.

The overhead spending variance and the overhead efficiency variance are useful only if variable overhead

According to this method, every unit of the product is assigned all direct, fixed, and variable costs. This method includes the cost of direct materials and labor as well as a portion of the overhead costs associated with it in the final costing of every unit of the product.

The purpose of this paper is to show people how they can afford medications that they need to live a good quality of life and drain their wallets with the need for their diabetic medication. This topic is known by many, especially those who are directly impacted. The information and research being provided in this article are facts given from reliable resources. There have not been any direct studies on how to save money with having needs for things such as diabetic medication. Research has been done to show the increase in cost for medication and how large of an impact is has on pharmaceutical drugs. The research given was done by using a search engine called Google Scholar. To display a thorough analysis and give legitimacy to the

The financial breakeven point considers how many units it would take in the first year to bring the company’s NVP to zero. To do this, fixed cost (rent included) must be added to the operating cash flow and then divided by the contribution margin. In this case, 30,000 units would need to be sold.

“Cost-minimization analysis is mostly applied in the health sector and is a method used to measure and compare the costs of different medical interventions” Springer. Cost minimization analysis is the simplest type of cost analysis. The central focus is that one medical intervention is the same as another, at lower cost. That is the outcomes must be the same.

The internal sales data showed that the business would need $45,000 in monthly revenue to break even. The sales forecast which have been prepared keep in mind a 65% gross margin, however, based on actual figure for 2009, this target has not been reached, and the forecasted sales have fallen.

This method aims to compare two or more treatment alternatives, having equal safety and efficacy. However, it is must that, the two alternatives must be therapeutically equivalent (with the same safety and efficacy). This method is simple and relatively straightforward in which two or more alternatives having same safety and efficacy are selected, their costs are measured, compared, and the alternative with least cost is identified. Therefore, it helps to identify the least costly treatment among the alternatives. As a result, helps to include drug in the formulary, include the drug in health care policies, exclude the drugs with high cost comparatively from the formulary, and to increase the utilization

Answer: A firm's fixed cost is a periodic cost that remain unchanged as output changes. Variable costs are the costs that change as output change. The number of ovens in a bakery usually do not change, so the cost of ovens is fixed cost. The cost of salary paid for employees sometimes changes, thus this cost could be a variable cost.

All the costs by a company can be broken into two categories, fixed costs and variable costs. Costs that are independent of output are called fixed costs. Fixed costs remain constant throughout the relevant range and are usually considered sunk for the relevant range. Buildings and machinery are included inputs that cannot be adjusted in the short term. They are only fixed in relation to the quantity of production for a certain time period. The cost of all inputs is variable, in the long run.

3 variable costs indentified, they are power, operations, material. They are proportional to the revenue intake.

The essential relationship between fixed and variable costs is the same whether the budget is static or flexible. The key is that in the flexible budget, both fixed and variable costs are subject to change. In most cases,

-(PM W.3) (PM O.2) Look for a manufacturer who can give us short period of lead time.

Fixed costs are those which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense, straight-line depreciation expense, etc.