Bank finance articles and tips

When goods are manufactured there are typically two types of costs that comprise the "total cost" of manufacturing the product. Fixed costs are the costs associated doing business, such as lease of the land that the production facility is built on, the building itself, marketing, administrative, and other overhead are all combined into a "Fixed Cost". A Variable Cost is the incremental cost to produce one more unit of output, for example the amount of electricity needed to produce another unit, the additional materials required, and the additional labor hours required to assemble it. These variable costs are directly tied to the production of the good, while the fixed costs are shared among all units produced....