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Essay / Research Paper Abstract
This 3 page paper looks at the AT&T, identifies the potential fixed and variable costs and uses these to create a breakeven analysis. The calculations are shown. In order to undertake this exercise is it is necessary for some assumptions be made, which are explained and justified. The bibliography cites 1 source.
Page Count:
3 pages (~225 words per page)
File: TS14_TEattbreak.rtf
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Unformatted sample text from the term paper:
is necessary to understand the differences between these two types of cost, and how they are calculated. Looking at an organization such as AT&T this calculation can be complex due
to board and diverse nature of the organization. The fixed costs of the cost which will remain the same regardless of the level of businesses is undertaken. Categories of
costs that are included within this are us of a permanent nature, such as costs associated with real estate, this may include rent and capital expenditure on leases, maintenance. By
comparison variable costs of those costs which will vary directly to the level of business which is gained, in many companies these may be calculated as the more important, such
as the goods to manufacture a particular product. However, as AT&T the main provision is that of a service rather than a physical product. However, when considering the way in
which costs are incurred it may be argued that many costs are neither purely fixed or purely variable, as costs such as wages for administration overheads may be reduced where
sales levels fall in the same quantity of customer service provision is not required. In order to facilitate a breakeven analysis we need to differentiate between the fixed costs and
the variable costs. The traditional approach variable costs are these are the direct costs, also known as the cost of goods or services, which is deducted before the gross profit
is calculated. Therefore, we will assume that the total variable costs for the organization are $50,405 million for the year. However, the variable cost across all the different services and
with different customers. If the calculation is going to look at the breakeven point a suitable way of dividing this need to be assessed. The simplest is by calculating a
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