These costs rise and fall with the factory’s operational levels, as more energy is consumed to run machinery at higher rates of production. Similarly, equipment depreciation can be considered a variable cost if it is calculated using the units of production method, which ties the expense to the number of units produced. A manufacturing facility’s… Continuar lendo How are fixed and variable overhead different?

The total payment stays the same each month, while the portion going to principal increases and the portion going to interest decreases. In the final month, only $1.66 is paid in interest, because the outstanding loan balance at that point is very minimal compared with the starting loan balance. Loans for major purchases like cars,… Continuar lendo Amortization Calculator

If the company runs out of inventory, there is a shortage cost, which is the revenue lost because the company accrual basis does not fill an order. Having an inventory shortage may also mean the company loses the customer or the client orders less in the future. Economic order quantity (EOQ) is the ideal order… Continuar lendo Economic Order Quantity EOQ: Definition, Formula, and Guide