Total cost

Written by: Edmund Quek CHAPTER 6 THE THEORY OF COST LECTURE OUTLINE 1 2 2.1 2.2 2.3 2.4 2.5 2.6 3 3.1 3.2 3.3 INTRODUCTION SHORT-RUN THEORY OF COST Distinction between fixed cost and variable cost Total cost Marginal cost Average cost Relationship between marginal cost and average cost Optimum capacity LONG-RUN THEORY OF COST Cost minimisation in the long run Long-run average cost Productive efficiency References John Sloman, Economics William A. McEachern, Economics Richard G. Lipsey and

000, the owner will use $29,990 of it to put 10% down on the purchased building. With the other $20,010, the owner will make the necessary changes to the building, use the money for marketing, for business expenses and for purchasing inventory. The costs associated with changing the building are painting the inside, $179.79, painting the outside, $884.50, two signs, $1,590, and shelving, $2, 310. The next items that this loan would be used for would be the initial running of the radio, $500, the initial

200-010 Honors Paper Cost Volume Profit Analysis: Establishing a Decision Model In today’s modern world of businesses and corporations, there is a common goal shared throughout every industry: increase profits. With increases in technology and developing methods, businesses have come far lengths in increasing their profits, or operating income. Controlling costs is the key to a successful operation. Executives and managerial departments are using what they know about costs to create business strategies

I begin with identifying what type of costs and expenses are relevant to determine the decision to make the stickers internally or outsourcing to foreign or local manufacturers. Relevant costs are costs that could be avoided if dVider decided to outsource the production of stickers to overseas manufacturers while irrelevant costs are sunk costs such as machinery cost that already purchased and do not have any impact on the cost analysis of the alternatives because they cannot be avoided if outsourcing

golf operations, the pool, concerts, nature tours and visitors, concession operations, and administrative costs. A program budget focuses on the cost and revenues of specific programs (Finkler, Purtell, Calabrese, & Smith, 2013, pg. 76). This budget approach helps management evaluate a program’s profitability and aids in deciding if an organization can afford this specific program. Based on total revenues and operating expenses, the park is experiencing a loss in all program operations. According to

software packages currently exist that you think may support the expected requirements. If more than one exists, then select one that you feel may be the best option for your client. Compare each of the alternatives based on the following criteria a. Total cost of ownership(TCO) This can be only a rough estimate at this time.

budgeted sales in August exceeded July's sales units by 4000 units, however, sales declined in September by 2000 units from August. Peyten Approved budgeted sales price per units for the quarter was based on a sales price of $18 per unit. Thus, budgeted total dollars per month are

Hence, the costing process intended to establish the cost of a job is extremely important. Job order costing therefore is the costing system which establishes the cost of the jobs obtained from a client (Walther, n.d.). In this way, job order costing approximations the costs of producing products in line with clients' instructions. Cost Concepts Cost is the sum of expenses whether estimated or actual attributable to a

pricing is not widely used in practice include: 1. The manager of the supplying division uses a cost-based method to record revenues and does not have sufficient incentives to control costs. 2. This approach does not provide clear signals to division managers about the level of decentralization top management wants. 3. This approach tends to insulate managers from the frictions of the marketplace because costs, not market prices, affect the revenues of the supplying division. 4. It leads to problems

senior management to make the right decision whether to buy the crane directly from the manufacturer or subcontract it from another company over a 10 year plan. The purchasing section prepared a detailed list of the total cost of ownership of the crane for 10 years.Also, the costs involved in leasing the crane were