Hello Dr.Oâ€™Neal, and Classmates
A Fixed Cost, according to research is a businesses costs, such as rent, or lease of a building. A variable cost, entails a cost that varies with the level of output, which can increase or decrease depending on a companyâ€™s production volume (example are raw material, energy usage, labor, distribution costs (Investopedia, 2018 ). Finally step-cost involves a cost that does not change steadily with changes in volume activity. However it is noted that a step-cost is a fixed cost within certain boundaries (outside of which it will change) (Bragg, 2018 ).
The local government is running a flu vaccination program. Are the following costs fixed, variable, or step costs?
- Cost of occupancyâ€¦â€¦.. Fixed Cost
- Costs of managementâ€¦. Step â€“ Fixed Cost
- Costs of part-time employee salaries added on service volumeâ€¦ Variable Cost
- Costs of vaccine consumedâ€¦ Variable Cost.
Bragg,, Steven, 2018. Accounting Tools. Retrieved from https://www.accountingtools.com
Investopedia, 2018. What is a Variable Cost. Retrieved from https://www.investopedia.com