MKT 100 Lecture Notes - Lecture 5: Variable Cost

• School: Ryerson University
• Department: Marketing
• Course: MKT 100
• Professor: Yanina Chevtchouk

Document Summary

Variable costs: increase directly in proportion to level of sales or production , in dollars or units. Unit variable cost is fixed through all level of output. If i sell/make an additional unit will my costs increase? (cogs) Examples: sales commision, shipping/delivery charges, dm dl, supplies, wage of temporary or part time employees, bonuses. Capital costs: one time costs incurred independent of the quantity produced or sold and are deducted over more than one fiscal year period. Fixed operating costs: costs incurred independent of the quantity produced or sold are generally deducted in one fiscal year period. Unit fixed costs are variable through level of output, they get spread out as more units made. Cost of printing coupons and promotion, cost of mailing promotion, equipment land purchase, rent, depreciation. Example: acme coach company produces one kind of bus. 6 hrs of labour at , each bus. Takes 30 mins to prepare, has administration salaries of /hr.