Differences between indirect costs and direct costs, Financial Management

Assignment Help:

a) Variable costs: Remuneration of flight attendants, Meals and drinks onboard, Fuel.

Fixed costs: promotions and Advertising, Remuneration of administrative staff and Airport charges.

Subtract one mark for each pair of errors.

b) Application and Definitions of differences between indirect costs and direct costs. A direct cost is purposely related to a particular flight. For a flight on a basic airline carrier, the catering costs are considered to be direct costs. Indirect costs are not directly linked with a particular flight, e.g. insurance costs and advertising.

a) Complete the table for the expenses of producing wooden toy trains:

2131_Differences between indirect costs and direct costs.png

b) 

i. Graph

ii. Graph

c) AC falls from $25 per unit to $9.0 and then rises again to $9.7. This is representative of the pattern of diseconomies and economies of scale experienced by firms as they produce increasing levels of output.

d) Reasons might include a lack of working capital to exploit economies of insufficient or scale demand to justify producing at the optimal level of output. Full explanation needed for maximum marks.


Related Discussions:- Differences between indirect costs and direct costs

What do you understand by swap, Question 1 Swap is an agreement among t...

Question 1 Swap is an agreement among two or more parties to exchange sets of cash flows over a period in future and What do you understand by swap? Describe its features, kind

Price volatility characteristic of bond with embedded option, The price of ...

The price of the embedded option comprises two components. The first is the value of the same bond assuming it has no embedded option (option-free bond), th

Acquisition strategy, T he acquisition strategy The most important str...

T he acquisition strategy The most important strategic consideration is the size of the acquisition. The completion of smaller series should be considered in the beginning tha

What are the drawbacks of the payback, The drawbacks of the payback approac...

The drawbacks of the payback approach are as follows - Payback ignores the overall profitability of a project by ignoring post payback cash flows. In the illustration above the

What are the benefits of holding inventories, Q. What are the Benefits of H...

Q. What are the Benefits of Holding Inventories? (1) Timing of Demand and Supply: - Requirement to hold inventory of raw materials arises because it isn't possible for a firm

Valuation methods, Valuation Methods: 2 - Year Method Perpetual ...

Valuation Methods: 2 - Year Method Perpetual Growth Method Constant Growth Method Zero Growth Method Growth Phases Valuation Model:  'Constant Growth Met

List the benefits of the flexible exchange rate regime, List the benefits o...

List the benefits of the flexible exchange rate regime. Answer:  The benefits of the flexible exchange rate system include: a) Automatic attainment of balance of payments eq

Define major causes for the current account deficits, The United States has...

The United States has experienced continuous current account deficits as the early 1980s. What do you think are the major causes for the deficits? What would be the results of cont

Cost principle - accounting principle, Cost Principle - Accounting Principl...

Cost Principle - Accounting Principle According to this principle all the non-monetary assets of the business are display in the books of accounts at the historical cost that

Regular payback period, The director of capital budgeting for a firm has re...

The director of capital budgeting for a firm has recognized two mutually exclusive projects, A and B, with the following expected net cash flows:

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd