Description
Managing Fixed and Variable Costs for Organization
Choose a publicly-held organizations (TESLA). One organization must have high fixed costs and low variable costs, and the other organization must have low fixed costs and high variable costs.
Note: A publicly-held organization is a private-sector firm that is owned by stock holders. Companies with high fixed costs include manufacturing companies, such as automobile manufactures, whereas service companies, such as accounting firms, might have low fixed costs.
Create a minimum 8-slide Microsoft® PowerPoint® presentation, including detailed speaker notes, analyzing the methods of managing cost depending on the cost construction.
- Analyze your companies cost construction. Does the company have high fixed costs or low fixed costs? Do the compay have high variable costs or low variable costs? What evidence presents itself to support your findings?
- In Excel®, chart the relationship between total cost and the number of units produced (output) for the company (TESLA) . Plot two lines on the graph - one line for each company you analyzed. Copy your graph from Excel® and paste it into your PowerPoint® presentation.
- Analyze currently used methods to minimize costs for the companies and provide recommendations how to improve the process of minimizing costs based on the available information for the industries in which the companies operate. Note: Companies are categorized by the industries they operate in. For example, Wal-Mart is a company operating within the retail trade industry.
Cite a minimum of three peer-reviewed sources.
Format the assignment consistent with APA guidelines.
Explanation & Answer
I have attached your presentation, and excel.
Managing Fixed and Variable Costs for
Organization For Tesla
Name of the Author
College or University
Place
Contents
•
•
•
•
•
•
Introduction
Analysis of companies cost of construction
Comparison between total cost and no of unit produced
Recommendations for minimizing the cost of the company
Conclusion
References
Fixed Cost
An expense or cost that neither increases or decreases from changes in sales made or
units produced.
Introduction
Examples of Fixed cost
• Monthly rental payments of organization.
• Local council business rates.
• Office premises electricity and gas.
• Staff salaries, pension payments and National Insurance contributions.
• Water rates, broadband and telephone line rental.
• Mortgage and loan repayments.
• Vehicle leasing and maintenance.
• Accounting and legal.
Variable Cost
An expense that is accrued resulting from one additional sale or stock
production.
Examples for Variable Cost
•
•
•
•
•
•
Staff salaries paid on a piecemeal or time basis.
Cost of goods sold or made.
Raw materials used for production.
Travel, entertainment and hotels.
Delivery and transportation.
Sales commissions and bonuses.
Analysis-cost of Construction (Tesla and
GMC)
For this purpose we selected balance sheet of Tesla company and GMC.
In the balance sheet we can find the variable cost and fixed cost in the company
Liabilities .
In the balance sheet we can see there is a exponential increment in case of tesla
motor but in the case of GMC the rate of growth is steady that tend to show
that cost of construction is increasing.
Chart between total car produced and total cost
per year
Year
No of car Total Cost No of car Total Cost
Produced - (in million)- Produced - (in million)Tesla
tesla
GM
GM
2013
22000
1780
2786078
123737
2014
31665
4780
2935008
142042
2015
50450
6980
3082366
154467
2016
83922
17910
3236484
177854
Process for cost Reduction
1. Manufacturing
With manufacturing coming to low labour cost area the manufacturing cost will reduce.
2. Finance and Accounting
Outsourcing can be done to achieve lower Process cost
3. Human Resources
A PEO (Professional Employee Organization) is helping your payroll and offer the employees
a better pool of benefits. In addition, by grouping with other companies through a PEO, you
can get significant grouping di...