Watch This Video: Revenues, Profits, And Price To Help You P

Watch This Videorevenues Profits And Price To Help You Prepare Fo

Watch this video ( Revenues, Profits, and Price ) to help you prepare for this week’s discussion: Reply to these prompts using the company for which you currently work, a business with which you’re familiar, or the dream business you want to start: What are some key fixed and variable costs for this business? Remember, fixed costs do not change when output changes. That is, fixed costs remain even if the company is producing nothing. Variable costs increase as output increases. Must be 4 sentences at least!

Paper For Above instruction

In analyzing the costs associated with a business, it is essential to distinguish between fixed and variable costs to understand its financial structure effectively. Fixed costs refer to expenses that remain constant regardless of the level of production or sales volume; these include rent, insurance, salaries of permanent staff, and depreciation of assets. For example, in a manufacturing business, the factory lease and machinery depreciation are fixed costs because they must be paid whether the company produces a high or low volume of goods. Conversely, variable costs change proportionally with the output, such as raw materials, direct labor wages based on hours worked, and utility costs like electricity used during production; these costs increase as production expands and decrease when output diminishes. Understanding the distinction between fixed and variable costs helps managers in pricing strategies, budgeting, and deciding on production levels to maximize profitability.

References

  • Brigham, E. F., & Ehrhardt, M. C. (2016). Financial Management: Theory & Practice. Cengage Learning.
  • Drury, C. (2013). Management and Cost Accounting. Cengage Learning.
  • Hansen, D. R., & Mowen, M. M. (2014). Cost Management: Accounting and Control. Cengage Learning.
  • Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2018). Managerial Accounting. McGraw-Hill Education.
  • Horngren, C. T., Sundem, G. L., Stratton, W. O., Burgstahler, D., & Schatzberg, J. (2013). Introduction to Management Accounting. Pearson.
  • Kaplan, R. S., & Atkinson, A. A. (2015). Advanced Management Accounting. Pearson.
  • Anthony, R. N., & Govindarajan, V. (2014). Management Control Systems. McGraw-Hill Education.
  • Zhao, H., & Liao, B. (2020). Cost Accounting Fundamentals and Applications. Wiley.
  • Pollard, R. (2016). Cost Accounting: A Managerial Emphasis. McGraw-Hill Education.
  • Weetman, P. (2019). Financial & Management Accounting. Pearson.

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