Mkt 500

MKT500 Breakeven - Determining Your Costs

Companies have a variety of costs with which they grapple. To keep things simple, we will look at Variable Costs (VC) and Fixed Costs (FC).

The combination of VC and FC TOTAL Costs. In effect, VC FC TC.

What's a Fixed Cost (FC)? Fixed costs (FC) are costs that do NOT vary as your sales volume increases or decreases. Whether you sell one widget or 50,000 widgets, these are known costs that your company will have to pay regardless of volume of widgets sold.

Fixed Costs (FC): These might include fixed staff salaries, lease/rent, debt service, insurance -- in effect, any KNOWN cost that will remain constant, e.g., your insurance premium for 12 months is 12,000? or 1,000 for each and every month. Whether you sell many widgets or sell...