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Will Bury Business Proposal Essay

801 words - 4 pages

Team D's View on Economic’s in the World
Theresa Brooks, Maria Hooker, Robert Pontau, Ira Smith, Nicolle Timmons
ECO/561
January 20, 2014
Alfred Igbodipe

Team D's View on Economic’s in the World
Introduction
The objectives for week two are to 1) identify production level to maximize profits, 2) explain how to balance fixed and variable costs, 3) and apply economic cost concepts in making business decisions. The group discussed these objectives and came to the following conclusions.
Identifying Production Level to Maximize Profits

Profit maximization is a company’s process they undergo to determine the price levels and the best output in order for them to maximize their return. ...view middle of the document...

Balancing Fixed and Variable Cost
The balance fixed and variable cost the two types of budget used in business. The flexible budgeting is a reflection of fixed cost. The connecting link is fixed and variable costs this influence the budget formed by the flexible variables. The variable expenses comprise of those business-operating expenses with altering the changeable pricing. These expenses usually modify the relationship of the products or services. For example, an increase in merchandise demand impulsively raises the work and resources costs. For example, heavy rain means more business for lawn services though higher costs for work and gas.
Keep in mind expenses comprises each part of budgeting that remains equal forever. A business decides precisely the amount to use on advertising yearly. Businesses cannot always predict work needs and, that equals labor cost. Every business has a budget amount within the budget there are limitations the business needs for variable cost and fixed cost. If a business want to spend $150,000 on marketing within a month but needs $50,000 for labor costs, but the business merely has $130,000 for both. The business now has to decide whether to jeopardize losing capital through an overblown budget cost by reserving $30, 000 for labor and putting $100,000 towards marketing or withdrawing the possibility of the marketing campaign and funding the...

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