137 Sentences With "variable costs" | Random Sentence Generator

But variable costs like gas, food, electricity usage all go up.

Once they get it on the railroad, it's strictly variable costs.

Source: Getty Images/ERHUI1979 Source: Getty Images/ERHUI1979 Variable costs have their downsides.

Contrary to the sales-pitch, some of these firms face high variable costs.

A little more than 7 percent went toward user discounts and other variable costs.

" High operating leverage is defined by companies with "high fixed costs relative to variable costs.

Consumer businesses usually have moderate to high variable costs, so there is problem number one.

Regulated utilities make money by investing capital; the variable costs of fuel are borne by consumers.

The headcount reduction will lower Cathay's fixed cost structure, but not their variable costs, said Maybank's Aziz.

And Meero can also cut variable costs drastically — this is key when it comes to Meero's scalability.

Over 80% of the variable costs of driving are the in the value of the driver's time.

Commodity and Currency Risk Exposure Commodities, such as wheat and soybean, are around 60% of Alicorp's variable costs.

It means that if you deduct fixed costs, the company is generating a profit on variable costs alone.

As a refresher, a fixed cost stays constant regardless of output, and variable costs scale with the output of a business.

Maybe they can avoid about half their usual variable costs, which typically run around 333% of sales according to NYU Stern.

Terri Sewell that would create regional minimum wages pegged to the variable costs of living, from midtown Manhattan to Beckley, West Virginia.

This can help you know how much you need to save, and how much you can allocate toward variable costs like flights and gifts.

That means consumption, production and sales are coming to a screeching halt, which makes paying fixed costs such as rent impossible and renders variable costs expendable.

Charity health care, where doctors volunteer a certain number of hours a week and donations cover variable costs, has a long history in the United States.

About 60% of a refinery&aposs variable costs are tied to energy consumption, the company website states; making operations more efficient lowers costs while cutting emissions.

Experts recommend taking a monthly average of variable costs to determine how much you'll need to budget for; after, evaluate the categories and see where you can cut costs.

Image courtesy of Getty Images Image courtesy of Getty Images Taken together, startups that turn fixed costs into variable costs make it less capital-intensive to start a business.

You can do the same for variable costs such as credit card bills, although you'll want to check in on your account regularly to make sure things are going smoothly.

Jeff Bezos explained this in Amazon's 2000 letter to shareholders: Online selling (relative to traditional retailing) is a scale business characterized by high fixed costs and relatively low variable costs.

New models, like variable costs for open-source development, require workarounds and explanation in the budget process and cause even the most eager internal champion to lose time and energy.

UPM said it expected comparable operating profit in the first half of 2020 to be significantly lower than a year earlier due to lower sales prices, partly offset by decreases in variable costs.

UPM said it expected comparable operating profit in the first half of 2020 to be significantly lower than a year earlier due to lower prices, although these would be partially offset by reductions in variable costs.

We see many companies calculate CAC payback on gross margin, but we believe contribution margin is a more reliable measure because variable costs have a meaningful impact on unit economics and should not be discounted (pun intended!).

Instead of paying a monthly lease fee, along with all the other variable costs associated with operating a physical store, companies like Koio pay Leap on a percent of sales basis, effectively minimizing risk and incentivizing performance.

"Everything is under scrutiny: fixed and variable costs, material and personnel costs, investment projects, vertical integration and the product range," Zetsche told the company's annual general meeting in Berlin, where he was applauded by around 20213,000 shareholders.

It is for this very reason that when we conduct diligence on originators for an investment, our very first criteria is that the lender must be profitable on its first transaction (revenue less all variable costs and acquisition).

Autonomous taxi firms will innovate with new business models such as advertising, sponsorships, in-car services and more to allow them to drive costs of transport to almost zero, offsetting the variable costs with these additional revenue streams.

Carvana CEO Ernie Garcia told CNBC on Friday the variable costs for the online auto retailer are very low, so it is able to sell cars at a lower price, though quickly delivering a car can be quite expensive.

Protests in Hong Kong do not pose any financial risk to the group, Moncler told Il Sole 24 Ore on Sunday, adding the fashion label would act on variable costs and inventory handling to tackle potential impact from the Hong Kong unrest.

What contribution margin measures — and what it leaves outContribution margin is the revenue from a product or segment minus its variable costs, meaning raw materials, sales commissions, and other costs that can vary depending on how much of a product the company makes.

However, Jumia's metric excludes fulfillment and delivery costs associated with Jumia's network of warehouses, their fulfillment employees, and other related expenses, with the logic being that these costs are fairly flat year-to-year and less indicative of the variable costs of the business.

You need to create a three-to-five-year business plan, determine your target audience and how to reach it, realistically project revenue (which won't be accurate, but at least try), estimate your start-up costs and figure out when you'll break even based on fixed and variable costs.

Slack's slowing growth turns around as remote work booms A look inside one startup's work-from-home playbook Lime's valuation, variable costs and diverging categories of on-demand companies From Alex: The three of us were back today — Natasha, Danny and Alex — to dig our way through a host of startup-focused topics.

LFL SALES DOWN 4.5% * CITY PUB GROUP - RECENT TRADING IMPACTED BY COVID-19, ITS WIDER EFFECTS MAINLY ON SPORT, SOME SITES WITNESSED NOTICEABLE REDUCTIONS IN TRADE * CITY PUB - DIFFICULT TO ASSESS EXTENT TO WHICH VORUS COULD IMPACT TRADING, FINANCIAL PERFORMANCE AT THIS TIME * CITY PUB GROUP PLC - EXPECT A MATERIAL REDUCTION TO EXPECTATIONS FOR 2020 DUE TO COVID-19 * CITY PUB GROUP - TAKING MEASURES TO CUT COSTS AND PRESERVE CASH, INCLUDING REDUCTION IN EMPLOYEE COSTS ACROSS HEAD OFFICE AND AT SITE LEVEL * CITY PUB GROUP - MEASURES INCLUDE REDUCTIONS IN DIRECTOR SALARIES OF 25%, REVIEWING TRADING HOURS TO REDUCE NON-PRODUCTIVE OPENING TIMES * CITY PUB GROUP - MEASURES INCLUDE REDUCTION IN OTHER VARIABLE COSTS E.G. SKY/BT SPORT, ENTERTAINMENT, WHERE APPLICABLE * CITY PUB - SUFFICIENT CAPITAL TO MAINTAIN OPERATIONS FOR AT LEAST ANOTHER 6 MONTHS WITHOUT FURTHER CAPITAL EVEN IF GOVERNMENT MANDATES TEMPORARY CLOSURE OF PUBS * CITY PUB GROUP PLC - ALSO ENTERING INTO NEGOTIATIONS WITH ITS LANDLORDS TO SEEK RENT HOLIDAYS FOR NEXT 3-6 MONTHS Source text for Eikon: Further company coverage:

Garrison, Noreen, Brewer. Ch 2 - Managerial Accounting and Costs Concepts, pp 51 However, not all variable costs are direct costs. For example, variable manufacturing overhead costs are variable costs that are indirect costs, not direct costs. Variable costs are sometimes called unit-level costs as they vary with the number of units produced.

Decomposing Total Costs as Fixed Costs plus Variable Costs. The quantity of output is measured on the horizontal axis. Variable costs are costs that change as the quantity of the good or service that a business produces changes.Garrison, Noreen, Brewer.

Decomposing total costs as fixed costs plus variable costs. Quantity of output is measured on the horizontal axis. Along with variable costs, fixed costs make up one of the two components of total cost: total cost is equal to fixed costs plus variable costs. In Economics, fixed costs, indirect costs or overheads are business expenses that are not dependent on the level of goods or services produced by the business.

The costs output by the OSCAR model are classified into four categories: #direct variable costs: costs that fluctuate with the operations of the railway. such costs would include fuel, train crew, traffic cost, yard & terminal cost, rolling stock and infrastructure maintenance. #variable operating costs: include the direct variable costs with depreciation attributed to the shipment (freight or passengers). #total long term variable costs – include the variable operating costs and the cost of capital, or borrowing costs.

Fixed costs remain unchanged irrespective of changes in the production volume over a given period of time. Variable costs change according to the volume of production. Semi-variable costs are partly fixed and partly variable. # By controllability: Controllable costs are those which can be controlled or influenced by conscious management action.

ARPAR accounts for variable costs and additional revenues, thus it reflects the profit (bottom line) versus top line revenue.

Ch 2 - Managerial Accounting and Costs Concepts, pp 48 Variable costs are the sum of marginal costs over all units produced. They can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost. Direct costs are costs that can easily be associated with a particular cost object.

The two steps in computing the price are to compute the unit cost and to add a markup. The unit cost is the total cost divided by the number of units. The total cost is the sum of fixed and variable costs. Fixed costs do not generally depend on the number of units, while variable costs do.

In the other hand if the prices are below average total costs (fixed plus variable costs) but above average variable costs. If the market abuse is directed against the competitors, and not against suppliers and clients, the Austrian law provides provisions under § 1UWG (in connection with §5 para. 1 KartG 2005, if there is a competitive relationship) OGH 9.9.

An operating firm is generating revenue, incurring variable costs and paying fixed costs. The operating firm's profit is R − VC − FC. The firm should continue to operate if R − VC − FC ≥ −FC, which simplified is R ≥ VC.Png, I: 1999. p. 102Landsburg, S (2002) p. 193. The difference between revenue, R, and variable costs, VC, is the contribution to fixed costs and any contribution is better than none.

Once these tools have been made, the variable costs are low, which makes regular deep drawing very suitable for large and very large numbers of products.

The marginal product of labor is directly related to costs of production. Costs are divided between fixed and variable costs. Fixed costs are costs that relate to the fixed input, capital, or rK, where r is the rental cost of capital and K is the quantity of capital. Variable costs (VC) are the costs of the variable input, labor, or wL, where w is the wage rate and L is the amount of labor employed.

Some examples of direct Costs are direct labor, direct materials, commissions, piece rate wages, consumable supplies, freight in and out, and manufacturing supplies. All of these costs are variable costs.

Curling clubs playing on arena ice also enjoy the relative security of a fixed costs, without the need to plan for or budget variable costs for building maintenance and utilities.

Png, I: 1999. p. 102Landsburg, S (2002) p.193. A firm that is shut down is generating zero revenue and incurring no variable costs. However the firm still incurs fixed cost.

Any costs incurred by a firm may be classed into two groups: fixed costs and variable costs. Fixed costs, which occur only in the short run, are incurred by the business at any level of output, including zero output. These may include equipment maintenance, rent, wages of employees whose numbers cannot be increased or decreased in the short run, and general upkeep. Variable costs change with the level of output, increasing as more product is generated.

Short-run variable costs (VC/SRVC) increase with the level of output, since the more output is produced, the more of the variable input(s) needs to be used and paid for.

Not only is the monolith column more economically prudent when considering the value of product processing times, but, at the same time, less media is used, representing a significant reduction in variable costs.

Variable Costs: Any expenses that vary in the short- term based on the level of services provided, resources consumed, or other factors. For example, energy costs are variable based on the amount consumed.

Bade and Parkin, pp. 353-54. So the firm’s profit equals the negative of fixed costs or (–FC).Landsburg, S (2002) p.193 An operating firm is generating revenue, incurring variable costs and paying fixed costs.

This is because funds have both fixed and variable expenses, but most expenses are variable. Variable costs are fixed on a percentage basis. For example, assuming there are no breakpoints, a .75% management fee will always consume .

Activity Based Costing is based on the belief that activities cause costs and therefore a link should be established between activities and product. The cost drivers thus are the link between the activities and the cost. Generally, the cost driver for short term indirect variable costs may be the volume of output/activity; but for long term indirect variable costs, the cost drivers will not be related to volume of output/activity. In traditional costing the cost driver to allocate indirect cost to cost objects was volume of output.

Melvin & Boyes, (2002) p. 222. Because fixed costs must be paid regardless of whether a firm operates they should not be considered in deciding whether to produce or shut down. Thus in determining whether to shut down a firm should compare total revenue to total variable costs (VC) rather than total costs (FC + VC). If the revenue the firm is receiving is greater than its total variable cost (R > VC), then the firm is covering all variable costs and there is additional revenue ("contribution"), which can be applied to fixed costs.

A firm that is shut down is generating zero revenue and incurring no variable costs. However, the firm still has to pay fixed cost. So the firm's profit equals fixed costs or −FC.Samuelson, W & Marks, S (2006) p. 286.

A firm will choose to implement a shutdown of production when the revenue received from the sale of the goods or services produced cannot even cover the variable costs of production. In that situation, the firm will experience a higher loss when it produces, compared to not producing at all. Technically, shutdown occurs if average revenue is below average variable cost at the profit-maximizing positive level of output. Producing anything would not generate enough revenue to offset the associated variable costs; producing some output would add further costs in excess of revenues to the costs inevitably being incurred (the fixed costs).

If all fixed costs are recoverable, then the firm should shut down if price drops below average total costs rather than average variable costs. Pindyck, R & Rubinfeld, D: (2001) Thus in determining whether to shut down a firm should compare total revenue to total variable costs (VC) rather than total costs (FC (fixed costs) + VC). If the revenue the firm is receiving is greater than its variable cost (R > VC) then the firm is covering all variable cost plus there is additional revenue which partially or entirely offsets fixed costs.Samuelson, W & Marks, S (2003) p. 296.

Thus, VC = wL . Marginal cost (MC) is the change in total cost per unit change in output or ∆C/∆Q. In the short run, production can be varied only by changing the variable input. Thus only variable costs change as output increases: ∆C = ∆VC = ∆(wL).

One can decompose total costs as the sum of fixed costs and variable costs. Here output is measured along the horizontal axis. In the Cost-Volume-Profit Analysis model, total costs are linear in volume. The total cost curve, if non-linear, can represent increasing and diminishing marginal returns.

These costs are variable costs. A company will pay for line rental and maintenance fees each period regardless of how much power gets used. And some electrical equipment (air conditioning or lighting) may be kept running even in periods of low activity. These expenses can be regarded as fixed.

CVP is a short run, marginal analysis: it assumes that unit variable costs and unit revenues are constant, which is appropriate for small deviations from current production and sales, and assumes a neat division between fixed costs and variable costs, though in the long run all costs are variable. For longer-term analysis that considers the entire life-cycle of a product, one therefore often prefers activity-based costing or throughput accounting.The Controversy over the contribution margin approach, in MAAW, Chapter 11. When we analyze CVP is where we demonstrate the point at which in a firm there will be no profit nor loss means that firm works in breakeven situation 1\.

A major drawback of the high-low method is that no foreign factors are taken into account. Once a level of production has been reached the firm would have to purchase additional assets such as machines or employees in order to attain the increase in production levels. The disadvantage of calculating semi-variable costs through this particular method is that it would underestimate the cost as it does not separate the fixed and variable costs, leading to the increase in expenditure being neglected and resulting in incorrect forecasts. This could lead to the firms bottom line eroding as the individual would estimate lower costs than what it would occur and profits would be lower than expected.

They were truly the pioneers who introduced new cost concepts like fixed and variable costs, standard cost, cost centers, relevant costs, etc. in the literature. The development of cost accounting in this period was undoubtedly slow. In addition, cost accounting tried to adapt itself within the framework of financial accounting.

This means that the largest firm tends to have a cost advantage, and the industry tends naturally to become a monopoly, and hence is called a natural monopoly. Natural monopolies tend to exist in industries with high capital costs in relation to variable costs, such as water supply and electricity supply.

Revenue R = PQ, price times quantity. Average variable cost AVC = VC/Q, variable cost divided by quantity. Thus, R ≥ VC implies p ≥ AVC. Conventionally stated, the shutdown rule is: "in the short run a firm should continue to operate if price equals or exceeds average variable costs."Samuelson, W & Marks, S (2003) p. 227.

The long-run decision is based on the relationship of the price P and long-run average costs LRAC.In the long run there is no distinction between average variable costs and average costs because all costs are variable. Landsburg, S (2002) p.167 If P ≥ LRAC then the firm will not exit the industry.

Share prices are mostly determined by overhead costs of production, but are also determined by share prices of other CSAs, variable costs of production, market forces, and income level of the community. Many CSAs have payment plans and low-income options. Shares are distributed in several different ways. Shares are most often distributed weekly.

The operating firm's profit is R – VC – FC . The firm should continue to operate if R – VC – FC ≥ –FC which simplified is R ≥ VC.Png, I: (1999) p.102.Landsburg, S (2002) p.194 The difference between revenue, R, and variable costs, VC, is the contribution toward offsetting fixed costs, and any positive contribution is better than none.

Adjusted RevPAR (or ARPAR, adjusted revenue per available room), is a performance metric used in the hospitality industry. It is calculated by dividing the variable net revenues of a property by the total available rooms (see more formulas below). The difference between ARPAR and other metrics (RevPAR, TRevPAR, GOPPAR) is that it accounts for variable costs and additional revenues.

The worldwide commission rate for advertising agencies is fixed at 15% of the total billing. This is the only source of income they earn from media. The 15% must cover costs such as payroll, fixed and variable costs. There are cases that agencies are forced to lower their rates to the level of 5% to 10% due to competition.

One can decompose total costs as the sum of fixed costs and variable costs. Here output is measured along the horizontal axis. In the Cost-Volume-Profit Analysis model, total costs are linear in volume. Since short-run fixed cost (FC/SRFC) does not vary with the level of output, its curve is horizontal as shown here.

Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc. . The Marketing Accountability Standards Board (MASB) endorses the definitions, purposes, and constructs of classes of measures that appear in Marketing Metrics as part of its ongoing Common Language: Marketing Activities and Metrics Project. Decomposing Sales as Contribution plus Variable Costs.

The Carnot method is an allocation procedure for dividing up fuel input (primary energy, end energy) in joint production processes that generate two or more energy products in one process (e.g. cogeneration or trigeneration). It is also suited to allocate other streams such as CO2-emissions or variable costs. The potential to provide physical work (exergy) is used as the distribution key.

A monopolist should shut down when price is less than average variable cost for every output level – in other words where the demand curve is entirely below the average variable cost curve. Under these circumstances at the profit maximum level of output (MR = MC) average revenue would be less than average variable costs and the monopolists would be better off shutting down in the short term.

Discretionary fixed costs usually arise from annual decisions by management to spend on certain fixed cost items. Examples of discretionary costs are advertising, insurance premia, machine maintenance, and research & development expenditures. Discretionary fixed costs can be expensive. In business planning and management accounting, usage of the terms fixed costs, variable costs and others will often differ from usage in economics, and may depend on the context.

A "fixed" cost would be monthly payments made as part of a service contract or licensing deal with the company that set up the software. The upfront irretrievable payment for the installation should not be deemed a "fixed" cost, with its cost spread out over time. Sunk costs should be kept separate. The "variable costs" for this project might include data centre power usage, for example.

In the short run, a firm operating at a loss [R < TC (revenue less than total cost) or P < ATC (price less than unit cost)] must decide whether to continue to operate or temporarily shut down.Perloff, J. (2009) p. 231. The shutdown rule states "in the short run a firm should continue to operate if price exceeds average variable costs".Lovell (2004) p. 243.

While diseconomies of scale are typically associated with large mature firms, similar problems have been observed in the growth phase of small and medium-sized manufacturing companies. Mclean has observed that this can occur once the workforce exceeds around 20 employees. At this point business complexity grows more rapidly than revenue. The business experiences falling productivity, leading to rising variable costs along with rapidly rising overheads.

A natural monopoly is when a company can serve the market most efficient way. This is usually due to fixed costs and variable costs. If the fixed costs are very high, it will result in it not being effective for more than one company on the market. For example, if we consider the electricity supply of a city, it is not worthwhile for anyone to build a second tram network.

" Chandra and Paperman (1976) specified, that "serious studies in cost accounting started only in the 1890s with the writings of Metcalfe, Garcke and Fells, Norton, Lewis, and later with Church, Nicholson and Clark. They were truly the pioneers who introduced new cost concepts like fixed and variable costs, standard cost, cost centers, relevant costs, etc. in the literature. The development of cost accounting in this period was undoubtedly slow.

This reduced consumption in response to higher prices has generated efficiency gains by lowering expansion requirements and variable costs. Increased efficiency also has brought about a smaller workforce and reduced the number of employees for every 1,000 subscribers in major cities. For example, between 1995 and 2000, the number of employees per 1,000 subscribers dropped from 6.8 to 3.7 in Barranquilla, and from 3.2 to 2.3 in Bogotá.

Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the variable cost per unit. "Contribution" represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. This concept is one of the key building blocks of break-even analysis.Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010).

Railway costing is the calculation of the variable and fixed costs of rail movements. Variable costs are those that increase or decrease with changes in the traffic volumes or service levels and include fuel, maintenance and train crew costs, for example. Fixed costs are normally associated with items such as head office, interest charges and other overhead. Unit costs can then be calculated based on the expenses of the railway divided into standard categories.

On 13 July 2018, Carvalho joined Real Betis on a five-year contract. The club paid €16 million plus an additional €4 million in variable costs for 75% of the player's rights, with €10 million more to come later for a further 20% of his rights depending on certain conditions and achievements. He made his La Liga debut on 17 August, playing 65 minutes in a 0–3 home loss against Levante UD.

The methodology used in railway costing breaks down the costs of rail traffic to their unit value and from there determines their relationship to traffic handled and service provided. Therefore, as traffic and services change, the effect of these changes can be estimated from the unit values previously determined. The costing model methodology allows for variable costs to increase as traffic increases, whereas the fixed costs will remain constant, regardless of the overall level of traffic.

Fixed costs are a serious challenge for B&M; businesses. Fixed costs are payments that a business has to make for elements such as rent of a store and monthly payments for services such as a security alarm. Fixed costs stay the same for a business even if it ramps up its operations or winds down its operations during a slow period. In contrast, variable costs change as a business ramps its operations up or down.

The economy is experiencing full employment (everyone who wants to work has a job), the best technology is being used and production efficiency is being maximized. So the question becomes, what is the cost of producing more oranges or cars? If the economy is at the maximum for all inputs, then the cost of each unit will be more expensive. The economy will have to incur more variable costs, such as overtime, to produce the unit.

Generally, a firm must have revenue R \ge TC, total costs, in order to avoid losses. However, in the short run, all fixed costs are sunk costs. Netting out fixed costs, a firm then faces the requirement that R \ge VC (total revenue equals or exceeds variable costs), in order to continue operating. Thus, a firm will find it profitable in the short run to operate so long as the market price equals or exceeds average variable cost (p ≥ AVC).

An OR suite that puts up with excessive surgical times can schedule itself efficiently but still lose its financial shirt if many surgeons are slow, use too many instruments, or expensive implants, etc. These are all measured by the contribution margin per OR hr. The contribution margin per hour of OR time is the hospital revenue generated by a surgical case, less all the hospitalization variable labor and supply costs. Variable costs, such as implants, vary directly with the volume of cases performed.

Cooperative sourcing is a collaboration or negotiation of different companies, which have similar business processes. To save costs, the competitor with the best production function can insource the business process of the other competitors. This is especially common in IT-oriented industries due to low to no variable costs, e.g. banking. Since all of the negotiating parties can be outsourcers or insourcers the main challenge in this collaboration is to find a stable coalition and the company with the best production function.

Notably, variable costs greatly depend on the technology used, the factor making the difference being the acid consumption. Between 50 and 80 kg of H2SO4 frequently required to produce 1 ton of alkylate. At preferred condition, the consumption of acid can be much lower, such as 10–30 kg of acid per ton of alkylate. In a SAAU acid costs frequently account for about one third of the total operating costs of alkylation, hence there is considerable incentive to reduce H2SO4 consumption.

These are by far the largest content acquisition costs. Second, Pandora pays licensing fees to agencies such as BMI, ASCAP, or SESAC in order to compensate composers, songwriters and publishers. Lastly, Pandora also pays TiVo Corporation for song and artist information; this has recently been structured as a flat monthly fee. High variable costs mean that Pandora does not have significant operating leverage, and in the next couple years might actually have negative operating leverage due to an unfavorable shift in product mix towards mobile.

In 2006, 72% of Peru's total electricity generation came from hydroelectric plants (total generation was 27.4 TWh), with conventional thermal plants only in operation during peak load periods or when hydroelectric output is curtailed by weather events.EIA This “underuse” of the country's thermal capacity is due to the high variable costs of thermal generation. In 2004, the country's reserve margin was estimated at 45%. However, when those high cost thermal plants were taken out of the equation, margins fell to as low as 15%.

In comparison with only heat pump utilization, it is possible to reduce the amount of electrical energy consumed by the machine during the weather evolution from winter season to the spring, and then finally only use thermal solar panels to produce all the heat demand required (only in case of indirect-expansion machine), thus saving on variable costs. In comparison with a system with only thermal panels, it is possible to provide a greater part of the required winter heating using a non-fossil energy source.

In most situations, revenue-maximizing prices are not profit- maximizing prices. For example, if variable costs per unit are nonzero (which they almost always are), then a more complex computation of a similar kind yields prices that generate optimal profits. In some situations, profit- maximizing prices are not an optimal strategy. For example, where scale economies are large (as they often are), capturing market share may be the key to long-term dominance of a market, so maximizing revenue or profit may not be the optimal strategy.

A space–time or time–memory trade-off in computer science is a case where an algorithm or program trades increased space usage with decreased time. Here, space refers to the data storage consumed in performing a given task (RAM, HDD, etc), and time refers to the time consumed in performing a given task (computation time or response time). The utility of a given space–time tradeoff is affected by related fixed and variable costs (of, e.g., CPU speed, storage space), and is subject to diminishing returns.

To illustrate the new rule it is necessary to define a new cost curve, the average non-sunk cost curve, or ANSC. The ANSC equals the average variable costs plus the average non-sunk fixed cost or ANSC = AVC + ANFC. The new rule then becomes: if the price is greater than the minimum average cost, produce; if the price is between minimum average cost and minimum ANSC, produce; and if the price is less than minimum ANSC for all levels of production, shut down.Besanko and Braeutigam (2002) p. 310.

Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. A clear example of this is the airline industry. As an industry, profitability is low because the industry's underlying structure of high fixed costs and low variable costs afford enormous latitude in the price of airline travel. Airlines tend to compete on cost, and that drives down the profitability of individual carriers as well as the industry itself because it simplifies the decision by a customer to buy or not buy a ticket.

Kent State Stark balloon at the 2008 Pro Football Hall of Fame Festival Balloon Classic Invitational Kent State University Stark's Senior Guest Program supports adults ages 60 and up. Designed to encourage Ohio's Senior Citizens to broaden their knowledge and skills, or revisit areas of interest that they may not have pursued as a traditional college student. Senior Guests audit and attend regular credit classes on a space-available basis. Courses taken through the Senior Guest Program are free, however, some classes have variable costs such as books or special course fees.

EDLP strategies generally result in lower fixed costs, since they require less advertising for promotional prices, less labor to execute price changes, and simpler pricing and inventory management systems with lower overhead. EDLP can also result in more predictable consumer demand and therefore fewer stocking and supply-chain problems. High-low pricing strategies generally result in lower variable costs, since promotional retailers can sell more products by offering discounts. They are able to take advantage of surplus at the wholesale level and also eliminate excess inventory at the retail level.

Contribution margin-based pricing is a pricing strategy which works without any mention of gross margin percentages. (German:Deckungsbeitrag) It maximizes the profit derived from a company's assortment, based on the difference between a product's price and variable costs (the product's contribution margin per unit), and on one's assumptions regarding the relationship between the product's price and the number of units that can be sold at that price. The product's contribution to total operating income is maximized when a price is chosen that maximizes the 'contribution margin per unit X number of units sold'.

To develop an approximation of a project cost depends on several variables including: resources, work packages such as labor rates and mitigating or controlling influencing factors that create cost variances. Tools used in cost are, risk management, cost contingency, cost escalation, and indirect costs . But beyond this basic accounting approach to fixed and variable costs, the economic cost that must be considered includes worker skill and productivity which is calculated using various project cost estimate tools. This is important when companies hire temporary or contract employees or outsource work.

The cost of supplying water consists, to a very large extent, of fixed costs (capital costs and personnel costs) and only to a small extent of variable costs that depend on the amount of water consumed (mainly energy and chemicals). The full cost of supplying water in urban areas in developed countries is about US$1–2 per cubic meter depending on local costs and local water consumption levels. The cost of sanitation (sewerage and wastewater treatment) is another US$1–2 per cubic meter. These costs are somewhat lower in developing countries.

In the rubber pad forming process only a milled lower die is required on which a metal plate is placed. Afterwards, the shape of the lower die is pressed in the plate with the rubber mold. In most cases, the contour, hole patterns and the like will be cut with a 3D laser cutter. Rubber pad press formed product The simplicity of the rubber press tool causes tooling costs to be around 85 to 90% lower than those of regular deep drawing while the variable costs are higher.

Some cost accounting practices such as activity-based costing will allocate fixed costs to business activities for profitability measures. This can simplify decision-making, but can be confusing and controversial. In accounting terminology, fixed costs will broadly include almost all costs (expenses) which are not included in cost of goods sold, and variable costs are those captured in costs of goods sold under the variable costing method. Under full (absorption) costing fixed costs will be included in both the cost of goods sold and in the operating expenses.

Within the graph above, the Average Fixed Cost curve and Average Variable Cost curve cannot start with zero, as at quantity zero these values are not defined since they would involve dividing by zero. Short-run average cost (SRATC/SRAC) equals average fixed costs plus average variable costs. Average fixed cost continuously falls as production increases in the short run, because K is fixed in the short run. The shape of the average variable cost curve is directly determined by increasing and then diminishing marginal returns to the variable input (conventionally labor).

Operating models vary, but host universities generally cover fixed costs like labor and PPE, while looking to the press to cover variable costs from the sale of books and other revenue. Sales of academic books have been declining, however, especially as University libraries cut back their purchases. At Princeton University Press in the 1960s, a typical hardcover monograph would sell 1660 copies in the five years after publication. By 1984 that average had declined to 1003 and in after 2000 typical sales of monographs for all presses are below 500.

The rules are equivalent--if one divides both sides of inequality TR > VC (total revenue exceeds variable costs) by the output quantity Q one obtains P > AVC (price exceeds average variable cost). If the firm decides to operate it will produce where marginal revenue equals marginal costs because these conditions insure profit maximization (or equivalently, when profit is negative, loss minimization).Samuelson, W & Marks, S (2006) p.286. Another way to state the rule is that a firm should compare the profits from operating to those realized if it shut down, and select the option that produces the greater profit (positive or negative).

Evaluation of cost accounting is mainly due to the limitations of financial accounting. moreover maintenance of cost records has been made compulsory in selected industries as notified by the government from time to time. Also, in an organisation set up cost accountant is placed at seniority than a managerial accountant cost accounting : theory and practice, textbook by Bhabatosh Banerjee In the early industrial age, most of the costs incurred by a business were what modern accountants call "variable costs" because they varied directly with the amount of production. Money was spent on labour, raw materials, the power to run a factory, etc.

Adding this to the variable costs of $300 per coach produced a full cost of $325 per coach. This method tended to slightly distort the resulting unit cost, but in mass-production industries that made one product line, and where the fixed costs were relatively low, the distortion was very minor. :For Example: if the railway coach company made 100 coaches one month, then the unit cost would become $310 per coach ($300 + ($1000 / 100)). If the next month the company made 50 coaches, then the unit cost = $320 per coach ($300 + ($1000 / 50)), a relatively minor difference.

Marshall's work used both these approaches, but he focused more on costs. He noted that, in the short run, supply cannot be changed and market value depends mainly on demand. In an intermediate time period, production can be expanded by existing facilities, such as buildings and machinery, but, since these do not require renewal within this intermediate period, their costs (called fixed, overhead, or supplementary costs) have little influence on the sale price of the product. Marshall pointed out that it is the prime or variable costs, which constantly recur, that influence the sale price most in this period.

Financial risk, market risk, and even inflation risk can at least partially be moderated by forms of diversification. The returns from different assets are highly unlikely to be perfectly correlated and the correlation may sometimes be negative. For instance, an increase in the price of oil will often favour a company that produces it, but negatively impact the business of a firm such an airline whose variable costs are heavily based upon fuel. However, share prices are driven by many factors, such as the general health of the economy which will increase the correlation and reduce the benefit of diversification.

For instance, if someone is considering pre-ordering movie tickets, but has not actually purchased them yet, the cost remains avoidable. Both retrospective and prospective costs could be either fixed costs (continuous for as long as the business is operating and unaffected by output volume) or variable costs (dependent on volume). However, many economists consider it a mistake to classify sunk costs as "fixed" or "variable." For example, if a firm sinks $400 million on an enterprise software installation, that cost is "sunk" because it was a one-time expense and cannot be recovered once spent.

Variable costs include wages (for employees paid by the hour) and electricity for operating machinery used by the business during its operating hours. If a business increases its hours of operation, its hourly wages and electricity bill will rise, but its rent and security alarm costs will stay the same (assuming that the business does not add additional locations). Start-up companies and other small businesses typically find it hard to pay all of the fixed costs that are part of their venture. Research shows that 70% of new start up businesses fail within the first 10 years.

The European competition law art. 82 EC and § 5 KartG 2005 prohibit a market dominant enterprise, as well as a collective of several dominant enterprises, which intentionally suppressing a competitor or increasing their respective market share by using methods other than those of legal competitive performance.(OGH 9.10.2000,ÖBI 2001,135 – subscription prices ; OGH 16.12.2002, 16 Ok 11/02 –Red Bull) According to the law predatory pricing is in the one hand given if the market-dominat enterprise or enterprises controlling the local market, because it offers their products at prices, below their own average variable costs.

In econometrics it is often desirable to have a model of the cost of production of a given output with given inputs--or in common terms, what it will cost to produce some number of goods at prevailing prices, or given prevailing prices and a budget, how much can be made. Generally there are two parts to a cost function, the fixed and variable costs involved in production. The marginal cost is the change in the cost of production for a single unit. Most cost functions then take the price of the inputs and adjust for different factors of production, typically, technology, economies of scale, and elasticities of inputs.

Contribution margin-based pricing maximizes the profit derived from an individual product, based on the difference between the product's price and variable costs (the product's contribution margin per unit), and on one's assumptions regarding the relationship between the product's price and the number of units that can be sold at that price. The product's contribution to total firm profit (i.e. to operating income) is maximized when a price is chosen that maximizes the following: In cost-plus pricing, a company first determines its break-even price for the product. This is done by calculating all the costs involved in the production such as raw materials used in its transportation etc.

Even-aged forest management is the harvesting system of choice in many parts of the world because it is often considered to be the only method that is economically viable. Forestry operations have extremely high variable costs- per hour expenses for harvesting equipment and per kilometer expenses for log transportation compose a very large portion of the total cost to harvest a stand. Therefore, companies must obtain as much productivity as possible from their hourly equipment in order to be profitable. Uneven-aged management techniques where only certain trees are harvested, such as shelterwood systems, incur the same hourly costs while harvesting fewer trees per hour.

In 1975, Phillip Areeda and Donald Turner developed a short-run cost-based test, widely referred to as the ‘Areeda-Turner rule’. The rules are based on short term focus, even when the predatory-pricing strategy is a long term strategy, because the long run would be inefficient, as it would be too speculative. The Areeda-Turner rule suggests prices at or above reasonable expected average variable costs (AVC) are presumed to be lawful, but prices below AVC are presumed to be unlawful and anti-competitive. In EU law, the approach to testing for predatory pricing under Article 102 has been explained in a number of important cases.

The concept of semi-variable cost (also referred to as semi-fixed cost) is often used to project financial performance at various scales of production, where it is an expense which contains both a fixed-cost component and a variable-cost component. It is related to the scale of production within the business where there is a fixed cost which remains constant across all scales of production whilst the variable cost increases proportionally to production levels. Adopting the example of a factory, fixed costs can include the leasing of the factory building and insurance whilst the variable costs can be listed as overtime pay and purchasing of the raw materials.

This would allow all employees in the business to calculate the semi-variable costs and its components easily resulting in them having a better understanding of how the company performs and its expenses. However, the high-low method can only produce an estimate. As it only uses two sets of data, the highest and lowest at that, it can be largely unreliable as often firms can have high variances in production levels and this method would not be able to capture the average activity levels, causing an incorrect figure to be found. There are more accurate methods such as the least-squares regression, although this is much more complex to use.

A major advantage of the high-low method is that it is relatively simple to calculate. This enables an estimate for the fixed costs and variable costs can be found in a short time, with only basic mathematics and no expensive programs to run the calculations, allowing for the firm to invest their finite resources elsewhere. This is particularly useful for smaller firms which do not that the budget to afford external, more qualified accountants. As this particular method only uses the highest and lowest figures it means individuals in companies can simply research the data in the company database (as the total costs and scale of production would be widely available to employees or easily attainable).

In general, waves will begin a few seconds after the player defeats the prior one, but roughly every three waves on all bar Nightmare difficulty, the player is given a break where they can set up traps and initiate the next wave when they are ready. As the War Mage, the player has the ability to place numerous traps and arm themselves with weapons and equipment to defeat the orcs. The player selects a number of traps and equipment (up to ten) from their current Spellbook; once the player starts placing traps they will be bound to this selection. Traps can be placed on any appropriate surface, but each trap costs in-game currency to place, and traps will have variable costs based on their effectiveness.

This allowed the full cost of products that were not sold in the period they were produced to be recorded in inventory using a variety of complex accounting methods, which was consistent with the principles of Generally Accepted Accounting Principles (GAAP). It also essentially enabled managers to ignore the fixed costs, and look at the results of each period in relation to the "standard cost" for any given product. : For example: if the railway coach company normally produced 40 coaches per month, and the fixed costs were still $1000/month, then each coach could be said to incur an Operating Cost/overhead of $25 =($1000 / 40). Adding this to the variable costs of $300 per coach produced a full cost of $325 per coach.

They tend to be time-related, such as interest or rents being paid per month, and are often referred to as overhead costs. This is in contrast to variable costs, which are volume-related (and are paid per quantity produced) and unknown at the beginning of the accounting year. For a simple example, such as a bakery, the monthly rent for the baking facilities, and the monthly payments for the security system and basic phone line are fixed costs, as they do not change according to how much bread the bakery produces and sells. On the other hand, the wage costs of the bakery are variable, as the bakery will have to hire more workers if the production of bread increases.

In economics, total cost (TC) is the total economic cost of production and is made up of variable cost, which varies according to the quantity of a good produced and includes inputs such as labour and raw materials, plus fixed cost, which is independent of the quantity of a good produced and includes inputs that cannot be varied in the short term: fixed costs such as buildings and machinery, including sunk costs if any. Total cost in economics, unlike in cost accounting, includes the total opportunity cost (implicit cost) of each factor of production as part of its fixed or variable costs. The rate at which total cost changes as the amount produced changes is called marginal cost. This is also known as the marginal unit variable cost.

Predatory pricing can be split into two stages. Firstly, there is the predation stage, where dominant firms offer a good or service at a below-cost rate which reduces profits in the short-term, but is intended to price out competitors from the market. Secondly, there is the recoupment stage, where dominant firms charge monopoly prices in the long-term to recover their losses. Under EU law, the European Commission can account for recoupment as a factor in determining whether predatory pricing is abusive.Case 202/07 P, France Télécom SA v Commission of the European Communities [2009] ECR I-02369, para 111 This is because predatory pricing can only be economically effective if a firm can recover its short-term losses from pricing below average variable costs (AVC).

Railway costing is the calculation of the variable and fixed cost components of rail movements. Due to the vast array of data that can be used in the calculations, railway costing is typically done using a mathematical model like OSCAR For example, OSCAR would be able to calculate the cost of shipping 80 tonnes of coal from Point A to Point B, or the cost of moving 3000 passengers from Point C to Point D. The OSCAR model will estimate the variable costs of a railway due to the movement of traffic, the provision of a service, or a variety of other factors. Once costs are determined, appropriate tariffs can be set to generate the revenue necessary to offset the chosen cost level (plus profit). OSCAR can also be used for line analysis and investment analysis.

It is more difficult for lower-income individuals and households to save and invest because they need to use a higher percentage of their income for fixed and variable costs thus leaving them with a more limited amount of disposable income to optimize their consumption. Accordingly, a natural wealth gap exists in any market as some workers earn higher wages and thus are able to divert more income towards savings and investment which build wealth. The wealth gap in the United States is large and the large majority of net worth and financial wealth is concentrated in a relatively very small percentage of the population. Sociologist and University of California-Santa Cruz professor G. William Domhoff writes that "numerous studies show that the wealth distribution has been extremely concentrated throughout American history" and that "most Americans (high income or low income, female or male, young or old, Republican or Democrat) have no idea just how concentrated the wealth distribution actually is." In 2007, the top 1% of households owned 34.6% of all privately held wealth and the next 19% possessed 50.5% of all privately held wealth.