Question

As a result of the pandemic, several manufacturing companies have had to cease operations. While operations have ceased, fixed costs (utilities, building rentals, wages, etc.) are still incurred. How can companies overcome these costs without revenue from sales?

Answer 1

Companies can manage these fixed costs by:-

1. Check if the fixed cost is covered by the government's pandemic support. If they are then the employer should claim benefits under those schemes.

2. The cost which is not covered under the government scheme should be controlled. For example, electricity expenses, water expenses should be minimized because of no production.

3. For rent, a tax holiday can be requested from the landlord.

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