McGrew_MBA 733 Week 6 Discussion Issues

McGrew_MBA 733 Week 6 Discussion Issues - Trish McGrew...

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Trish McGrew MBA733, Prof. Bowsher Week 6 Discussion Issues, February 8, 2011 For each type of cost below, provide a specific cost example, given the context described. Also, provide a brief explanation of why your specific example fits the definition of that type of cost (e.g., for a., explain why the specific cost you selected is a variable cost). a. A variable cost at a trucking company. Fuel cost is a variable cost because it is a cost that fluctuates (varies) frequently and it increases with the kilometer travelled. Paying attention to fuel tax rates and which States you buy your fuel can make a difference of several hundred dollars a year. How fast one travels also has an impact on how much fuel is needed and how often. b. A direct cost at a furniture manufacturing company. A direct cost at a furniture manufacturing company would be the purchase of wood. The wood is a main component in producing wood furniture. Fabric is another example because these materials can be traced to the product. c.
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McGrew_MBA 733 Week 6 Discussion Issues - Trish McGrew...

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