o Increase price thus increasing sales o Decrease COGS Operating Expenses Costs

O increase price thus increasing sales o decrease

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o Increase price thus increasing sales o Decrease COGS Operating Expenses Costs associated with production and operations of the business (Variable and Fixed Expenses) o Wages o Commissions o Advertising o Insurance o Rent o Repairs o Utilities o Depreciation Speaking of Depreciation…. As fixed assets are “used up” they become an expense to the business….through depreciation Straight Line Depreciation o (Acquisition Cost - Residual Value) / (Expected Life) o you buy a tractor for $50,000 and figure it has a 5 year life cycle and at the end of the 5 years it will have a salvage value of $0. What is the yearly depreciation expense for this Tractor? Depreciation Straight Line o (Acquisition Cost – Salvage Value) / (Expected Life) Double Declining Balance o Acquisition Cost * Rate of Depreciation o Rate of Depreciation = (100%) / (Expected Life) * 2 Units of Production o (Number of units produced / Life in number of Units) * (Acquisition Cost – Salvage Value) Sum of Years Digits o ( Remaining Life / Sum of Years Digits) * (Acquisition Cost – Salvage Value)
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