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Variable And Fixed Costs In Company Management

Author

Listed:
  • Sorin Briciu

Abstract

The cost absorbs all the expenses of production for a company at a certain level of the activity. For eliminating the influence of the fixed costs's absorbtion and for a better supervision of other causes of digressions, the managers can apply the method of rational imputation of the fixed costs. The managers should, in some cases, take into consideration the total costs and not the unit costs. Variable costs, fixed costs and unit costs should be taken into consideration at all times. When managers decide on the products to be manufactured, they have to know how the income and expenses vary along with the changes in the production volume. That is why they have to separate the fixed and the variable costs. The identification of a variable or fixed cost helps the manager to forecast the total costs and to take the decisions based on an existent situation.

Suggested Citation

  • Sorin Briciu, 2008. "Variable And Fixed Costs In Company Management," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(10), pages 1-14.
    • Handle: RePEc:alu:journl:v:1:y:2008:i:10:p:14
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    Citations

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    Cited by:

    1. Dan Ioan Topor & Alina Putan & Sorinel Capusneanu, 2011. "The Role of Management Accounting in Providing Information for Making Decision Within an Entity," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 1(2), pages 56-66, December.
    2. Alina Puţan & Dan Ioan Topor & Maria Gheorghian, 2012. "Cognitive Meanings Of Management Control In Estimating The Degree For Achieving The Strategy," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-7.
    3. Dan Topor & Sorinel Căpuşneanu & Alina Puţan, 2012. "Evolution And Performance Analysis For Wine Entities In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(14), pages 1-9.
    4. Dan Topor & Ioana Dorin & Alina Puţan, 2011. "The Role Of Cost Information In Decision-Making. Case Study," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(13), pages 1-15.

    More about this item

    Keywords

    fixed costs; variable costs; the cost of the under-activity;
    All these keywords.

    JEL classification:

    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics

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