Assignment: Fixed & Variable Cost Project
Understanding the nature of fixed and variable costs is extremely important to managers. This knowledge is used in planning, making strategic and tactical decisions, evaluating performance, and controlling operations.
Research object: Auto repair shop
Required
1. In each business decide what single measure best reflects the overall level of activity in the business and give examples of costs that are fixed and variable with respect to small changes in the measure of activity you have chosen
2. Explain the relationship between the level of activity in each business and each of the following: total fixed costs per unit of activity, total variable costs, variable cost per unit of activity, total costs, and average total cost per unit of activity.
3. Discuss and refine your answers to each of the above questions with your group. For example, which of the above business seems to have the lowest ratio of variable to fixed costs? Which of the businesses' profits would be most sensitive to changes in demand for its services? Why?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.