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The standard mileage rate fix business is based on a n annual study by independent contractor Runzheimer International of the fixed an d variable costs of operating an automobile.
Sources of Information (1) The Unit Price less Unit Variable Cost is called Contribution because it represents the amount that can be contributed toward fixed costs by each unit sold after the variable costs are deducted from the sales price.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.
A final point of symmetry regarding price-takers is that just as the market-determined product price must at least equal the value of minimum average variable cost to insure an incentive for a loss-minimizing ppt to remain open, the market-determined wage must be no greater than the value of maximum average revenue product to insure the same for a loss-minimizing rpt; only if these conditions hold will the firm--ppt or rpt--be able to cover its total variable cost and thus be able to insure its loss (or negative total profit) is less by remaining open than shutting down.
Many managers fail to include all true variable costs in the analysis because they have historically been included in overhead costs.
For the first time ever, the 2002/03 enterprise costings - compiled from data recorded from 58 lowland and 36 Less Favoured Area flocks in England - include fixed as well as variable costs to provide a better assessment of enterprise profitability.
Develop process flexibility with variable cost structures.
Such measures may already be leading regulators to prevent sales of electricity above the highest average variable cost of generators used to provide electricity.