Week 38 (6.1.08)

Learn

1. Fixed costs do not move in relation to sales or business volume. Variable costs do.
2. At break even, revenues equal cost.
3. A positive contribution margin indicates that all variable costs are covered and that the business segment is "contributing" to fixed cost.
4. The contribution margin of a product or service is its sales minus variable costs.
5. Pre-tax income of a product or service is its revenue minus total costs (variable+fixed cost)
6. Activity-based costing quantifies the cost of the activities most frequently performed by the organization. By sequencing activities together, the organization can identify the total cost of a product or service.

Unlearn

Do not know that when a business is in a break even situation, the revenue it generates equal to the costs of a business. Cost also can be separated into fixed and variable categories.

Relearn

Break some of the home expenses into fixed and variable categories. As fixed costs is relatively stable and can't be changed much, by reducing the variable costs, can help to generate more saving to the home. Start to be more conscious on expenses that can reduce the variable costs to generate more income for home.