respond to the following peer discussion 18

Hello Dr.O’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 company’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?

  1. Cost of occupancy…….. Fixed Cost
  2. Costs of management…. Step – Fixed Cost
  3. Costs of part-time employee salaries added on service volume… Variable Cost
  4. Costs of vaccine consumed… Variable Cost.

References

Bragg,, Steven, 2018. Accounting Tools. Retrieved from https://www.accountingtools.com

Investopedia, 2018. What is a Variable Cost. Retrieved from https://www.investopedia.com

 
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