BSM 200 Study Guide - Final Guide: Web Design, Variable Cost, Administrative Assistant
11 Apr 2015
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Document Summary
Being in business is about making a profit, but it"s not always about the revenue that comes in, it"s also about the expenses you have. 3 types of expenses: variable costs, operating expenditures, capital investments. To calculate other metrics: what"s happening with product and market. To id opportunities for cost opportunities: some things we have control over, others don"t. To understand price and volume trade-offs: between charging a high price and selling fewer items or charging low price and selling more items. To understand profitability: revenue coming in but also expenses going out. Variable costs: related directly to production and sale of each unit. The more units that are produced, the higher the total variable costs. If the cost cannot be directly related to production of sales and would have been incurred regardless of the # of units produced, it is not a variable cost.
