ACC-202 Lecture Notes - Lecture 28: Gross Profit, Fixed Cost, Making Money
1 Apr 2016
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Period costs a. k. a sg+a (sales/salary, general and administrated) If you"re not making money from your gross profit line you will not be able to stay afloat. Below the line expenses that reduce what is available for profit. Electricity: can vary with the number of coffees you make, there will be a level you can"t drop below e. g. you need lights. Salaries employees: somebody always has to be paid/ always some type of expense, you can never fully avoid this cost but you have more control over it. Hire one person or three: really controllably to some extent by the manager (mixed cost) can be fixed but can rise. Tax: property tax set dollar amount (fixed cost, does not change throughout the year, can"t get out of it no matter how much you sell. The more you sell the c. o. g. s increases. = a cost that cannot be directly and easily traced to revenue.
