MKT 100 Lecture 2: Week 2 - Situation Analysis

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MKT 100 Full Course Notes
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The grouping of expenses according to their common characteristics. Variable costs: balloon & string (bottom right); paint & material (top left. One time fixed costs (capital costs): real estate & building (centre) Increase directly in proportion to the level of sales in dollars or units sold. Change in proportion to the activity of a business. Sometimes referred to as unit-level costs since they vary with the number of units produced. Can also be referred to as cost of goods sold (cogs) Fixed costs are sometimes referred to as operating overhead expenses or recurring costs. Capital costs are the fees associated with the initial setup of a plant or project, after which there will only be recurring operational or running costs. Capital costs are fixed and are therefore independent of the level of output. Payment may be spread out over many years in financial reports and tax returns.

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