HTM 2030 Lecture Notes - Lecture 5: Variable Cost, Fixed Cost

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 2030
• Professor: William Murray

Document Summary

The relationship (%) between variable costs and sales remains relatively constant, regardless of sales volume. Fixed costs remain relatively constant in dollar terms, regardless of sales volume. Once appropriate costs levels have been determined, they must be controlled if a business is to remain profitable. Variable rate: find vr when given, sales price = . 25 / unit, variable cost = . 70 / unit. Calculation: vr = . 70 / . 25 variable rate = variable cost $ / sales $ = 0. 348 (34. 8%one decimal place and % will be better to know more detail information) Calculation: total sales = . 37 * 19,364 = ,980. 68. Vc =s- (fc+p) = s - fc - p: vc = ,988. 68 - ,408 - ,952. 80. Variable rate = variable cost $ / sales : vr = $ 151,627. 88 / ,980. 68. Contribution rate: find cr when given, sales price = . 50, variable cost = . 95.