Reduced volume translates into reduced ability to cover the indirect fixed costs
of the company.
The ratemaking principle that fixed costs
should be recovered through fixed charges (such as the customer charge and demand charge) and variable costs should be recovered through variable charges (such as the energy charge and the wholesale power cost adjustment charge) helps to eliminate cross subsidies among customers.
However, there has been a recent shift in operator's strategies, with many now turning fixed costs
into variable costs, an approach that favours a benchmarked operational excellence model to reduce costs.
Furthermore, it is necessary to consider, for instance, fixed costs
This means considering not only fixed cost
components such as premiums, fees and expenses, but also the variable cost components of losses and loss expense.
Company A has a high level of fixed costs
, since it since it manufactures the products it sells.
Don't let your labor costs become fixed costs
. Executives manage three big bundles of assets: traditional fixed assets, labor, and inventory.
Good manufacturing performance, combined with lower fixed costs
, helped us show second quarter profitability, which further increases our confidence that we can achieve our financial targets."
Surprisingly, fixed costs
are not specifically defined in government cost accounting materials.
If you look deep, you will find that some costs currently classified as overhead or fixed costs
really are variable.
When we have performed regression analysis in recent years, the standard error of costs other than materials and commission was usually so great that it was obvious that it was a step fixed cost
. In essence, the relative amount of truly variable cost in today's environment is eroding and has been replaced by step fixed costs
E determines the percentage mileage allowance annually and it remains fixed throughout the calendar year; it is based on E's review of a sample of documents submitted monthly by drivers (including receipts, logbooks and invoices) reflecting the drivers' operating and fixed costs