The interest owed over the life of the loan also is a fixed cost
A sunk cost is a fixed cost
that cannot be avoided while an avoidable fixed cost
is a fixed cost
that can be avoided.
Table 1: General Motors North America (GMNA) Operations-- Estimates of Fixed Costs
Panel A: Details Extracted from General Motors Press Releases [amounts in millions] 2002 2003 2004 GMNA sales revenue $114,444 $116,310 $114,582 GMNA pre-tax income $4,198 $915 $1,137 GMNA capacity utilization [two-shift rated] 88.
For this discussion, Special Interest (or pass-through) appropriations are not included in the list below because by their specific purpose when appropriated, they are fixed cost
Increasing test volume reduces the fixed cost
Subject pairs are presented with payoff tables that have entries differing only by a fixed cost
Assume further that 60 percent ($60,000) of this budget represents fixed costs
and the remaining 40 percent ($40,000) represents variable costs.
When the fixed costs
and the variable costs per unit are known, an analysis can be made of total cost based on the number of units produced.
By offering a fixed cost
for legacy consolidation, LIDP is taking the bulk of the risk off of the shoulders of the insurance carriers.
So, while gas is not a fixed cost
, it should be treated as such for this analysis because it's more fixed than variable in nature.
From their results, the authors urge text writers to highlight four key issues: the role and limitations of 1) management--long run versus short run operating leverage decisions, 2) engineering--variable cost changes associated with fixed cost
changes, 3) economic forces--competitive versus non-competitive markets and 4) mathematical results--DOL equals zero at the maximum profit output level, regardless of the level of fixed cost
As well as averaging less than a third of the fixed cost
bill in both cases, variable costs varied far less between the best and worst performing businesses, suggesting markedly less potential for improvement
A substantial portion of risk borne by any manufacturer derives from operating leverage: that is, the use of fixed cost
investment to lower variable costs.
a lower fixed cost
and a higher per-use rate--such as with a cell phone pricing scheme--it's usually best to go for the higher fixed-rate plan.
Staff is also' largely a fixed cost
at least for several months at a time if not longer: teachers are added for each new classroom, not for each new student.