HRT 374 Lecture Notes - Lecture 6: Fixed Cost, Variable Cost, Marginal Cost

• School: Cal Poly Pomona
• Department: Hospitality Management
• Course: HRT 374
• Professor: John Self

Document Summary

As sales volume increase, fixed cost $ stayed the same, but the % goes down. As sales goes up, variable cost goes up, variable cost % stays the same. Similar to mixed costs, except more constant. E. g. supervisor can supervise up to 15 housekeepers, then must hire additional supervisor. Part fixed cost and part variable cost. Similar to step costs, except that there are many steps in sales. Total cost= fixed cost + variable costs. Or tc= fc + (vc per unit x unit sales) Pick the highest month and the lowest month. To find the variable cost per room sold. To find a specific month "s variable cost of r and m. Use that month"s rooms sold x variable cost. To find that specific month"s fixed cost of r and m tc-vc= fc. E. g. human resources ----related to all department. Everything below operating expenses are indirect, which is overhead and controllable. All costs are controllable at some executive level.