Respond to this:

Identify the costs of a current or past project. Share your perspective on whether each cost is variable, fixed or mixed. If you list a cost as variable, describe what causes the cost to vary. If you list a cost as mixed, attempt to calculate the cost formula using the high-low method. Explain how knowing the costs are variable, fixed or mixed can help you manage a project budget.

Prototype part cost = variable. As we buy more volume, the cost per piece is lower.

Prototype tooling cost = fixed

Prototype build labor = variable. Depending on the length of a build, the labor cost will differ.

Design labor cost (time required to produce a design) = variable. Depending on number of hours needed to finish a design, the overall cost per design will differ.

Knowing or estimating these project costs is essential to determine our yearly expense budgets. These budgets are tracked on a monthly basis and reported to management if we are over or under budget and how is the budget trending (up, down or neutral).

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