Answer:
Fixed cost in an organization does not change and is fixed while the variable cost keep changing if the production is increased.
Explanation:
Fixed cost are said to be that cost which does not change with production level for a certain limit. Let us suppose there is no change in the rent amount if we have only factory for the production of goods.
But the variable cost are those cost which increases as production increases. More will be the variable cost when the production will be more. Also for per unit basis, the variable cost remains the same.
Fixed cost are not important in decision making if there is an excess of capacity available.
For example,
Direct labor, direct material -- variable cost
Salary of supervisor, rent of factory -- fixed cost
Even though there is not much change in the variable cost, like for suppose material price increases, a company can still make a budget that is based on the past experience and predicting the market prices. Similarly, if there is a machine that uses three units of direct material for a piece if finished product, which is not going to change in the future. Thus the company can make a budget.
Answer:
Explanation:
Inventories are part of investment and therefore included in GDP because firms produce goods and these goods may be unsold at the time GDP is computed
The value added method of calculating GDP recognizes inventory. Value added from raw materials to work in process and to finished goods are part of what goes into the computation of GDP
The number of units that Starling Co. sold was 11200
<u>Explanation:</u>
Given -
Operating income = $28,800
Fixed cost = $38,400
Selling price of one unit = $12
Variable cost = $12
Number of units sold, n = ?
Contribution margin per unit = $18 - $12
= $6
Therefore, number of units that Starling Co. sold was 11200
The strategy that they use is <span>signaling value by targeting sophisticated buyers
This type of strategy could only work if the target market has specific preferences.
Even though the number of potential consumers for this market tend to be considerably small compared to another market, but the customers that obtained through this strategy tend to show higher level of loyalty.</span>