agree or disagree with post? why? 300 words or more

In this portion of my discussion post I will discuss the differences between fixed, mixed, and variable cost. Fixed cost is a cost that does not change regardless of whether goods are services are produced or not. Unlike fixed costs, variable cost are a company's costs that are associated with the number of goods or services it produces. A company's variable costs increase and decrease with its production volume. When production volume goes up, the variable costs will increase. On the other hand, if the volume goes down, so too will the variable costs. Lastly, mixed cost is a cost that has the characteristics of both variable and fixed cost.

I currently work at a hospital in New Orleans and one example of a fixed cost is the property taxes another example is our cleaning services because they are currently contracted out to an outside party. An example of variable cost at the hospital are medical supplies and laboratory test. One example of a mixed cost would be the internet because of usage, and another would be rented medical devices.

It is important for managers to understand the difference in fixed, mixed, and variable cost because without the knowledge of understanding the difference it would be easy to go over budget and get into big financial trouble. Understanding the difference allows managers to forecast better for the future of the organization. Not only to save money but to also be profitable while doing so. For example knowing the average daily census of the hospital or each unit so the manager knows what par level to keep supplies for each unit to prevent ordering to much or not enough.

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