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Cost Of Operation
The cost of operation refers to the total expenses incurred in running a company or a specific business activity in its normal operations. It includes both fixed costs, such as rent, salaries, and insurance, and variable costs, such as raw materials, utilities, and production expenses. See also * Operating cost * Operations management * Loss leader A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion/marketing strategy, a "leader" is any popular artic ... References Strategic management {{management-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Variable Cost
Variable costs are costs that change as the quantity of the good or service that a business produces changes.Garrison, Noreen, Brewer. Ch 2 - Managerial Accounting and Costs Concepts, pp 48 Variable costs are the sum of marginal costs over all units produced. They can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost. Direct costs are costs that can easily be associated with a particular cost object.Garrison, Noreen, Brewer. Ch 2 - Managerial Accounting and Costs Concepts, pp 51 However, not all variable costs are direct costs. For example, variable manufacturing overhead costs are variable costs that are indirect costs, not direct costs. Variable costs are sometimes called unit-level costs as they vary with the number of units produced. Direct labor and overhead are often called conversion cost,Garrison, Noreen, Brewer. Ch 2 - Managerial Accounting and Costs Concepts, pp 39 while direct material and direct labor are oft ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Operating Cost
Operating costs or operational costs, are the expenses which are related to the operation of a business, or to the operation of a device, component, piece of equipment or facility. They are the cost of resources used by an organization just to maintain its existence. Business operating costs For a commercial enterprise, operating costs fall into three broad categories: * Fixed costs, which are the same whether the operation is closed or running at 100% capacity. Fixed costs include items such as the rent of the building. These generally have to be paid regardless of what state the business is in. * Variable costs, which may increase depending on whether more production is done, and how it is done (producing 100 items of product might require 10 days of normal time or take 7 days if overtime is used. It may be more or less expensive to use overtime production depending on whether faster production means the product can be more profitable). Variable costs include indirect overh ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Operations Management
Operations management is concerned with designing and controlling the production (economics), production of good (economics), goods and service (economics), services, ensuring that businesses are efficiency, efficient in using resources to meet customer requirements. It is concerned with managing an entire production system that converts inputs (in the forms of raw materials, Manual labour, labor, consumers, and energy) into outputs (in the form of goods and services for consumers). Operations management covers sectors like banking systems, hospitals, companies, working with suppliers, customers, and using technology. Operations is one of the major functions in an organization along with supply chains, marketing, finance and human resources. The operations function requires management of both the strategic and day-to-day production of goods and services. In managing manufacturing or service operations, several types of decisions are made including operations strategy, product ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Loss Leader
A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion/marketing strategy, a "leader" is any popular article, i.e., sold at a low price to attract customers. One use of a loss leader is to draw customers into a store where they are likely to buy other goods. The vendor expects that the typical customer will purchase other items at the same time as the loss leader and that the profit made on these items will be such that an overall profit is generated for the vendor. "Loss lead" is an item offered for sale at a reduced price that is intended to "lead" to the subsequent sale of other services or items. The loss leader is offered at a price below its minimum profit margin—not necessarily below cost. The firm tries to maintain a current analysis of its accounts for both the loss lead and the associated items, so it can monitor how well the sche ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
