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For any factory, the fix cost should be all the money paid on capitals and land. Such fixed costs as buying machines and land cannot be not changed no matter how much they produce or even not produce. Raw materials are one of the variable costs, depending on the quantity produced. Fixed costs are considered an entry barrier for new entrepreneurs.
Sunk cost. In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [1][2] Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. [3] In other words, a sunk cost is a sum paid in the past ...
According to the PMBOK (7th edition) by the Project Management Institute (PMI), Fixed Price Economic Price Adjustment Contract (FPEPA) is a "fixed-price contract, but with a special provision allowing for predefined final adjustments to the contract price due to changed conditions, such as inflation changes, or cost increases (or decrease) for special commodities".
A fixed cost is one that is not based on how much of a good or service a business produces. It’s sometimes referred to as an indirect cost, or “overhead.”. All businesses have fixed costs ...
In mathematical language, the price is an affine function (sometimes also linear function) of the quantity bought. An example would be a cell phone contract where a base price is paid each month with a per-minute price for calls. Sliding-scale price contracts achieve a similar effect, although the terms are stated differently. The price ...
In economics, average fixed cost (AFC) is the fixed costs of production (FC) divided by the quantity (Q) of output produced. Fixed costs are those costs that must be incurred in fixed quantity regardless of the level of output produced. Average fixed cost is the fixed cost per unit of output.
Price discrimination. Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider in different market segments. [1][2][3] Price discrimination is distinguished from product differentiation by the more substantial difference in production cost for ...
Opportunity cost, as such, is an economic concept in economic theory which is used to maximise value through better decision-making. In accounting, collecting, processing, and reporting information on activities and events that occur within an organization is referred to as the accounting cycle.