BUSI 2210 Lecture Notes - Lecture 4: Fixed Cost
10 Apr 2018
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Change with the volume of the product produced or sold. For a manufacturer, vc typically would include the costs of materials and labour. As more units are manufactured, total variable costs increase. Do not change with the volume and are those that would still be incurred, at least in the short run, even if no products were manufactured or sold. Fc can include the rental of a building, the cost of display cases, the advertising budget, and other expenses that would not change, once committed, irrespective of the volume sold or produced. The revenue obtained per unit, net of any discount offered to others in the distribution channel. Price/unit times volume (v) sold gives the total (or gross) revenue realized by the seller. The difference between p per unit and vc per unit. Unit contribution = p (per unit) vc (per unit) A british columbia fruit packer is thinking of setting up a small factory to produce frozen raspberry juice.
