Fixed or Variable Cost Essay -- cost, business,

constitute can be divided into opinionated and variable and by considering into fact that situated and variable equal can be unarguably sunder into devil, even though they behave differently based on the take of cut-rate gross sales of volumes. Since, cost is used in every field to fit the price of an item and the unit sold. Two of the main components of cost atomic number 18 fixed and variable cost and is used to differentiate between the cost that have no direct correlation to business and those that do. Definition- resolved cost is not affected by the veers in the sales, they have urbane relationship to the business and they do not change considerably when the sale join on or decrease. Fixed cost is congeal for particular gunpoint of time and changes occur during the specific time. Since, fixed cost does not change directly some of the mannikins of fixed cost are indemnity premium, rattling estate taxes etc. For example, an increase in the cost of restituti on premiums may be attributable to an insurance companys perception of increase risk associated with higher volume. Even though the increase in insurance cost is somehow related to an increase in volume, the cost of insurance is still considered a fixed cost (Tiffin, 2007). Other component of cost is variable cost changes frequently do not haves specific set period. Variable costs can be aptly defined as, which increase directly in proportion to the level of sales in dollars or units sold. Depending on the type of business, some examples would be cost of goods sold, sales commissions, shipping charges, delivery charges, and costs of direct materials or supplies, wages of underemployed or temporary employees, and sales or production bonuses. Both fixed and variable cost elements are components of mixed or semi-vari... ...the equation for a straight line as followsY = $3,400 + $0.80X Hence the above example shows that costs can be determined as either fixed or variable even in a s emi variable cost.In conclusion cost can be divided into two to find the exact amount of sale of an item sold and purchased by the customer. All fixed cost can be variable cost since, variable cost change often. Reference Tiffin, R., (2007) Finance and Accounting background signal Guide Accounting Literacy for the Non-financial Manager 2nd ed., London Thorogood. Hansen, D., Mowen, M., & Guan, L., Cost concern Accounting & Control 6th ed., Mason, Ohio South-WesternDittmer, P. & Keefe, D., (2009) Principles of Food, Beverage and Labor Cost Controls 9th ed., Hoboken, N.J lav Wiley & Sons, Inc. (US).Weetman, P. (2006) Management Accounting, FT/Prentice Hall (Pearson Education)