Respond to the required questions, double-spaced, APA format (source citations and reference insertions) essay (Each Question). In each Case Study, you must use at least three (3) references (in text), including the textbook (included below).
Textbook reference:
Managerial Accounting: Decision Making and Motivating Performance- Text Only: Datar, S.
M., & Rajan, M. V XXXXXXXXXXManagerial accounting: making decisions and motivating performance.
Boston: Pearson. ISBN: XXXXXXXXXX
(This Assignment Box maybe linked to Turnitin.)
125 Words (Bakari Miller) – Reply and Comment on the following:
The premise of these statements seems to be a bit contradictory to me. The first sentence said that there are no fixed costs, while the second stated that with time that all costs can be unfixed. When I think on that alone, it is almost as if it is being said that the time stipulation must be in place for a “fixed” cost to be “unfixed”. Hence the cost must first be fixed to even be unfixed. Therefore, I do not fully agree with the statement.
I do not agree with the first sentence of the discussion prompt. Like aforementioned, the costs initially have to be fixed. As it happens, an assumption of the CVP analysis states that costs must either be fixed or variable (Sanjay Bulaki Borad, XXXXXXXXXXHowever, I can agree with the second statement of the prompt due to the fact that in the short-run fixed costs are easily definable, but in the long-run, when given enough time even fixed costs can change from fixed to, semi-fixed, to ultimately variable costs. An example of this is the price of a tenant’s rent after renewing their lease multiple times.
The CVP analysis takes place in a vacuum, purely because of its assumptions. One being that all costs, both variable and fixed, remain the same i
espective of time, relevant range, and other economic factors such as price changes due to inflation (Sanjay Bulaki Borad, XXXXXXXXXXThese stringent assumptions disregard change but have no bearings on the validity of whether costs can be fixed or not.
125 Words (Shawna Lewis) – Reply and Comment on the following:
"There is no such thing as a fixed cost. All costs can be 'unfixed' given sufficient time." I would have to agree with this statement. Fixed costs are payments that are consistent every month. They are not easily changed such as car payments and rent or mortgage payments. Those payments can be changed, for instance refinancing your mortgage, but we all know those are not easily done.
When it comes to budgeting my bills the longest fixed cost, I have had would be my vehicle payment. Of course, all costs will change over time. Most of your fixed monthly bills can be changed by you over time as well. The more you pay eventually the payments will be lowered to adjust to the loan amount time.
CVP analysis, or cost-volume-profit, shows how much changes in a company’s cost. So, when it comes to fixed costs and when they become unfixed, the CVP will also change.