GMS 701 Lecture Notes - Lecture 10: Cyber Monday, Indirect Costs, Fixed Cost
19 Dec 2017
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How can we reduce cost: buy online, buy on sale, buy on black friday/ cyber monday. The lowest price that ensures a continuous supply of the proper quality where and when needed. Direct costs: can be specifically and accurately assigned to a given unit of production of a product or service, most dire(cid:272)t (cid:272)osts a(cid:396)e (cid:862)(cid:448)a(cid:396)ia(cid:271)le(cid:863) Variable costs: vary directly and proportionally with the units of products or services produced or services produced. Fixed costs: generally remain the same regardless of the number of units of products or services produced. Semi-variable costs: vary with the number of units of products or services being produced but are partly variable and partly fixed. Cost approach: price is set greater than direct costs, allowing for sufficient contribution to cover indirect costs and overhead, and leaving a margin for profit. Market approach: prices are set in the marketplace and may not be directly related to cost.
