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

The cost that does not change in total, with the change in activity is called fixed cost. The existence of fixed costs implies that individuals are not willing to work less than some minimum number of hours, termed reservation hours (Cogaj, 1980). Some implications that fixed costs bring are the contributions that are made to the imperfect competitive market structures that leads to non-competitive pricing. (Spence, 1976). Therefore fixed costs, forces an economy to choose from the large set of all conceivable products.

Example:

1. The company that I will be working in the future will have fixed costs that can be demonstrated when paying rent. The building or office space has a lease on the building for any company that needs space to operate their company. The rent on the office space is different depending on the square footage but the amount paid every month is the exact same without going up or down how stated in the contract and it does not matter if the company is earning revenue if it sold products or did not make any sales.

2. When working for a company I would be getting paid a salary based on my credentials, this amount will be paid every month as the contract, or offer letter stated. The salary will not change, if I did or did not make any sales, if the company is short on their finances, or if its a holiday.

A cost that changes, in total dollar amount, with the change in the level of activity is called variable cost. Variable costs (for medication and supplies) are saved if a facility does not provide a service while fixed costs (for salaried labor, buildings, and equipment) are not saved over the short term when a health care facility reduces service (Roberts, 1999). The variable cost is a weighted sum of the quantities of items on the shopping list multiplied by their expected prices at the store (Bell, 1998).

Example:

1. Currently the company I work for has shipping rates. Customers order their products for special occasions and the company charges a12% freight for shipping. Even though the total cost of products increases and the freight for shipping increases, the unit percentage of shipping remains constant per customer order.
2. If I was working for a kiosk in the mall I would be in a sales commission job position my paycheck every 15 days will vary on the sales I have made. If for two weeks I made 10 sales each day of work my salary would be a certain amount, however if I made 9 sales each day for the rest of the two weeks remaining in the month my paycheck will be different to the first paycheck of the month.

Mixed or semivariable cost has the characteristic of both variable and fixed cost (Nikolas, 2020).

Example

1. When wanting to pressure clean the store front, the machine can be rented at Home Depot, the rental charge can be $100 a day, plus .75 cents per 30 min use on the machine.
2. On the utility bill of the company office/building the service line is $50 dollars/ month with an additional charge to any consumption of water used that month. Which will make the bill different every month.

I believe that it is important for managers of the organization to understand the differences in these costs because they can plan for their company goals. For example if a company would like to open an office and they do not make any sales how will they come up with the finances to pay the rent. This make their business go out of business. Knowing that the fixed cost are going to be like glue each month they will be able to plan ahead.