Dear Sir / Madam,
Need a clarification as to this type of cost
Lets assume i have a coaching institute. I employ a professor for Coaching ACCA F2 @ an hourly rate of USD 25. The course requires the professor to take 50 hours. How is this cost classified. Is it variable since its based on hourly input or its fixed as my total number of students that class is constant ?
Further lets assume the class capacity is 50 students and i got enrollmentt for 60 students. So for additional 10 students i have to employ another class and another professor. In this scenario whats the classification of Professor fees from my point of view ?...Thanks...
Ask the Tutor ACCA MA
Clarification of Classification of Cost
11y ago#1The cost of the professor is a fixed cost because the total is not affected either by the number of students. (The number of hours is fixed so the total cost is not affected other than calculating it).
In the second case it is a stepped fixed cost.
The free lecture on cost classification will help you.
(In future, if you wish for me to answer questions then you should ask in the Ask the Tutor Forum)
Dear John,
Thanks a ton for great clarification and great clarity. I realised my mistake and will ensure the same in future
11y ago#3You are welcome :-)
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