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MessagePosté le: Jeu 1 Sep - 19:26 (2016)    Sujet du message: Operating Costing Features Pdf Download Répondre en citant




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Operating Costing Features Pdf Download

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Homepage SlideShare Channels Popular Presentations .. What is an 'Operating Cost' Operating costs are expenses associated with the maintenance and administration of a business on a day-to-day basis. For example, if a company cuts its advertising costs its short-term profits will likely improve, as it is spending less money on operating costs. Semi-variable costs vary in part with increases or decreases in production, like variable costs, but still exist when production is zero, like fixed costs. Because wages paid in conditions allowing for overtime have both fixed and variable components, they are considered to be semi-variable. For example, a manufacturing company must pay rent for some sort of factory space regardless of how much it is producing or earning. 403 Forbidden.. In the same way, the profitability and risk for the same companies are also easier to gauge.

Semi-variable Costs In addition to fixed and variable costs, it is also possible for a companys operating costs to be considered semi-variable (or semi-fixed). These costs represent a mixture of fixed and variable components and thus can be thought of as existing between fixed costs and variable costs. A fixed cost is one that does not change with an increase or decrease in sales or productivity and must be paid regardless of the companys activity or performance. The best course of action, then, is to keep operating costs as low as possible while still maintaining the ability to increase sales. Are you looking for. Because profits are determined both by the revenue that the company earns and the amount the company spends in order to operate, profit can be increased both by increasing revenue and by decreasing operating expenses. All Rights Reserved Terms Of Use Privacy Policy . It is sometimes possible for a company to achieve a volume discount or "price break" when purchasing supplies in bulk, wherein the seller agrees to slightly reduce the per-unit cost in exchange for the buyers agreement to regularly buy the supplies in large amounts, thereby diminishing the correlation somewhat between an increase or decrease in production and an increase or decrease in the companys operating costs.

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